BUSINESS BEFORE QUESTIONS

Manchester City Council Bill [ Lords] and Bournemouth Borough Council Bill [ Lords]

Motion made,
	That the promoters of the Manchester City Council Bill [Lords] and Bournemouth Borough Council Bill [Lords], which were originally introduced in the House of Lords in Session 2006-07 on 21 January 2007, may have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).— (The Chairman of Ways and Means.)

Hon. Members: Object.

Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill

Motion made,
	That the promoters of the Canterbury City Council Bill, Leeds City Council Bill, Nottingham City Council Bill and Reading Borough Council Bill, which were originally introduced in the House of Lords in Session 2007-08 on 22 January 2008, may have leave to proceed with the Bills in the current Session according to the provisions of Standing Order 188B (Revival of bills).— (The Chairman of Ways and Means.)

Hon. Members: Object.

National Curriculum Tests

Resolved,
	That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of the Report, dated 16 December 2008, of the Sutherland Inquiry into the delivery of National Curriculum tests in 2008.— (Ms Diana R. Johnson.)

ORAL ANSWERS TO QUESTIONS

HEALTH

The Secretary of State was asked—

Smoking

Jeff Ennis: What steps he plans to take to reduce the number of young people taking up smoking.

Alan Johnson: Reducing smoking is a public health priority for the Government. We will bring forward legislation to remove the display of tobacco from retail environments and tighten requirements on vending machines. Both policies primarily aim to protect young people from smoking. Protecting young people will also be a key theme in our new tobacco control strategy.

Jeff Ennis: I thank my right hon. Friend for that very positive response. Does he recall the private Member's Bill that I introduced in October 2005, entitled the Age of Sale of Tobacco Bill, in which I proposed to raise the age for smoking from 16 to 18? That proposal was later incorporated into the Health Bill, I am glad to say. Is he also aware that, in Barnsley, one third of all smokers under 18 buy their cigarettes illegally from what are known—for want of a better expression—as the local fag houses? The problem is so acute that Barnsley council has set up a tobacco task group to look at the issue. What more can the Government do to stop the illegal sale of tobacco to young people?

Alan Johnson: I pay tribute to my hon. Friend for his sterling work over a long period of time to get the age of sale increased to 18. He asks what more we can do. From April next year, the "three strikes and you're out" rule will come in. If any retailer is caught selling cigarettes to under-age children three times, they will not be allowed to continue retailing. Other measures to tackle illicit tobacco are important, particularly in the context of the famous Barnsley fag houses that we are now learning about. Micro-chipping illicit cigarettes is an important development from Her Majesty's Revenue and Customs, for example. There is a whole range of steps that should be taken, but that should not detract from the public health initiatives that we are taking in removing tobacco from the point of sale and ensuring that we take action to regulate vending machines.

John Bercow: I welcome the Secretary of State's proposed legislation, which offers the prospect of real and lasting progressive change for the better. Will he tell the House what steps he is taking to enlist the services of some of our sporting icons—the Olympic gold medallists spring readily to mind—in trying to persuade young people of the dangers of smoking and the benefits of abstinence?

Alan Johnson: I thank the hon. Gentleman for his welcome for our proposals. He has raised an important point. We know that there is an issue about young people smoking. On average, 10 per cent. of 11 to 15-year-olds smoke, but almost one in five 15-year-old girls smoke. They take up smoking—as most of us did in our youth—because they see role models and people whom they admire smoking. The message from Olympians and others, which we will ensure is strongly put forward, will help in that regard. The research evidence clearly shows that the only place where tobacco can now be advertised is on point-of-sale displays and that that gives young people the impression that smoking is normal. That is what we are seeking to address with these proposals.

David Clelland: Regardless of the merits or otherwise of the proposals, does my right hon. Friend accept that carrying out the proposed work will involve costs to small shopkeepers? Does he have an assessment of those costs, and does he have any plans to compensate retailers for them?

Alan Johnson: I accept that there are issues for small retailers, and of course there will be a cost. The Save Our Shop campaign is the brainchild of the Tobacco Retailers Association, which is an offshoot of the Tobacco Manufacturers Association, which represents Imperial Tobacco, Gallahers and others in the smoking industry. The campaign is estimating the cost at something like—

David Clelland: Make smoking illegal, then.

Alan Johnson: This might be totally irrelevant to the question that my hon. Friend asked, but the campaign has put the cost at something like £6,000. There is no evidence whatever for that. The evidence from the countries that have introduced these measures is that there is a maximum cost of £1,000. In Canada, it was £500. The cost of putting up the displays is met by the tobacco manufacturers—by the cigarette companies themselves. We will of course offer assistance to small businesses. That is why we are saying that this measure will not be introduced for small shops until 2013. That will give us plenty of time to have a full consultation and to ensure that this will not damage those businesses.

George Young: I also welcome the steps taken by the Government further to reduce the damage done by smoking-related diseases, but will the Secretary of State reflect on his decision not to make progress with one proposition that achieved 98 per cent. support in the consultation exercise—namely, the proposition that tobacco products should be sold in plain packaging? That seems to have been parked for the time being by the Government. Will the Secretary of State confirm that he is not ruling out considering that matter and that there remains a strong possibility of introducing it at some point?

Alan Johnson: The right hon. Gentleman has welcomed—indeed, two Opposition Members have welcomed—the proposals, unlike the Conservative Front-Bench team. I heard the argument from the Conservative Front Bench in last week's Queen's Speech debate that there was no evidence base for the proposals. I have to say, however, that despite the fact that the right hon. Gentleman is quite right about the huge response in favour of plain packaging, there is no evidence base that it actually reduces the number of young children smoking. We want to keep that under review, and when there is an evidence base for it, it could well be another important measure to meet our goal, which is to reduce the number of young people smoking.

David Taylor: As the chairman of the all-party group on smoking and health, I warmly welcome the proposals. There will not be evidence on plain packaging now, as we are the first country to suggest the measure, so it needs to be piloted in some way. May I say to the Secretary of State that I was disappointed in one aspect of the announcement—the failure to abolish vending machines, which are used as the medium of sale for fewer than 1 per cent. of all cigarettes? The suggestion that we can somehow tighten up to minimise the number of young people buying from vending machines is likely to prove a dead end. The sooner we introduce the abolition, the better.

Alan Johnson: I understand my hon. Friend's argument. We will take a power in the proposed Bill to ban vending machines. We were persuaded during the consultation, however, that there are other measures to restrict young people's access to vending machines without banning them. I do not think that Governments should move to banning things if there is another alternative. We were persuaded of the alternatives such as carrying out an age check before giving tokens to use in vending machines and other methods that have been used successfully to restrict access by young people. It is sane and rational to try those out first, to have the power to ban in the legislation if necessary and to move towards a ban if the other measures do not work.

Andrew Lansley: The Secretary of State knows that we want to proceed on the basis of evidence and he has appealed to evidence. Last Thursday, he told the House:
	"The number of young smokers in Canada... was reduced by 32 per cent. among 15 and 19-year-olds as a result of the implementation of the measure."—[ Official Report, 11 December 2008; Vol. 485, c. 724.]
	Well, I asked the House of Commons Library to look at the statistics from Canada and it says that the tobacco display ban was not introduced in all provinces; that it was introduced only in Manitoba and Saskatchewan; and that since the tobacco display ban was introduced, there were no statistically significant results for any reduction in the number of young people smoking in either of those provinces. Will the Secretary of State simply apologise for giving the House an inaccurate presentation of the data on Canada and will he put a note in the Library explaining his basis for the proposition that there is a proven reduction in young people smoking?

Alan Johnson: That is an extraordinary position for the Opposition Front-Bench team to take, particularly when we have produced the research from the British Heart Foundation—

Stephen O'Brien: It has just been shredded.

Alan Johnson: Well, if that is shredding— [Interruption.] The hon. Gentleman should hang on before he talks about shredding things.
	What Cancer Research UK's extensive evidence shows—and it was all produced during the consultation period—is this: young people are more receptive than adults to tobacco advertising; being exposed to tobacco advertising and/or promotion increases the likelihood that a young person will take up smoking; and large displays of tobacco convey the notion that smoking is common. In Canada, 12 out of 13 provinces have introduced this legislation—and they have introduced it because there is absolute evidence, as there is in Iceland and other countries that have introduced it, that it reduces the number of young people smoking.

Norman Lamb: Where else?

Alan Johnson: Thailand and the British Virgin Islands, if the hon. Gentleman wants an exhaustive list, but as my hon. Friend the Member for North-West Leicestershire (David Taylor) said, the point is this: someone has to be in the vanguard, which is why Australia and New Zealand are preparing to introduce such legislation. It is hugely disappointing that there is not a political consensus across the three parties, because the evidence is clear, the evidence is there.

NHS Dentistry

Paul Holmes: What recent assessment he has made of levels of access to NHS dentistry.

Andrew Robathan: What his most recent assessment is of levels of access to NHS dental treatment; and if he will make a statement.

Andrew Stunell: What recent assessment he has made of the adequacy of levels of access to NHS dentistry.

Ann Keen: In the 24 months to the end of June 2008, 26.9 million people saw an NHS dentist. Improving access is a top priority and we have increased dental funding to more than £2 billion. In addition, last week we announced that we have set up a review to advise how we can ensure that everyone who wants to see an NHS dentist can do so. The review will be led by Professor Jimmy Steele of Newcastle university.

Paul Holmes: Over the past two years, my constituents have constantly approached me to say that their dentist has stopped doing NHS work and that, contrary to what the primary care trust website says, they cannot find a dentist in Chesterfield or Staveley who will take new patients. Yesterday, a Chesterfield dentist of 32 years' experience told me that the current contract is the most bizarre arrangement ever devised by man. Will the Minister finally admit that the Government got the contract completely wrong, that 1.2 million fewer patients are seeing NHS dentists and that the contract needs scrapping and rewriting as quickly as possible?

Ann Keen: The British Dental Association is working very positively with us on the contract. The review that we have recently announced is to ask how we can improve access, but there is no question but that access has improved throughout the country.

Andrew Robathan: There is a question whether access has improved throughout the country. I have been telling Ministers for some time that the majority of my constituents, me and my family cannot find an NHS dentist in Leicestershire. That is the fact. Access is not better. The review announced last week is an admission of the failure of the contract. Instead of a review, how about the Government saying what they are going to do about this now to improve access to NHS dentistry.

Ann Keen: I suggest that the hon. Gentleman calm down a bit, for the sake of his own health. I am happy to advise him on how to do that. Access throughout the country and the oral health of patients throughout the country have improved. The review is assisting us to improve access. There are open lists in his constituency. That has been stated by the primary care trust.

Andrew Stunell: The Minister will know that there are 24,000 fewer patients registered with NHS dentists in Stockport, compared with 1997. Stockport primary care trust has been offering extra sessions to try to fill the gap, but local dentists prefer to stay private, saying that the fee structure is not sufficient for them to provide a professional service under the NHS. Does she share my concern at the state of NHS dentistry in Stockport and will her review tackle the issue, whereby my patients are denied NHS treatment and, in a recession, are forced either to pay to go private or, worse still, to go without treatment altogether?

Ann Keen: The review will be guided by the principles of the NHS next stage review, ensuring that services are responsive to the needs of individual patients, that there is a strong focus on prevention as well as treatment, and that there are continuous improvements in the quality of care, especially in relation to the inequalities at the moment.
	The whole House should also recognise the work that dentists have done with the contract and the improvements that have been made, such as the new treatments and the new dentists who are coming out of newly opened dental schools. I look forward to discussing the Health Committee report later this evening.

Doug Naysmith: My good friend the Minister has read the recent Health Committee report on dentistry, so she will be aware that there are parts of the country where very few people have any problems accessing an NHS dentist. That is true in my area, where I serve constituents from south Gloucestershire and Bristol. We found that where commissioning is taken seriously by PCTs and they collaborate with the local dentistry profession, excellent results can be produced. What will she do to ensure that PCTs take this matter seriously and work with their dentists to commission good services?

Ann Keen: I thank my hon. Friend. The Health Committee report points out how bad things were in many parts of the country before the contract changed, and how good they are where proper commissioning takes place. That is without question. More work has to be done on commissioning and I know that Professor Steele will be looking at that matter seriously. I welcome the opportunity to share the report with the House soon.

Paul Beresford: I have a slight interest in this matter, as is well known. The Minister will be aware that there are 13,000 people with oral cancer at any one time in the UK. About 50 per cent. of those people will die, and the mortality rate is getting worse, not better. The key is access—and I believe, as do dentists, that the key to access is the contract. There has been an implementation group running for some time—I do not know its name because it has changed. What suggestions has it made to the Minister to change that contract to make it more desirable for dentists to work for the national health service?

Ann Keen: The Health Committee's suggestions on the hon. Gentleman's point are taken very seriously by the Department. We want to work with Professor Steele to see how access to oral health can be improved, which the hon. Gentleman rightly raises as a concern; it is a concern to all of us. We want to make the contract work. So many people and PCTs are doing so, and this House should congratulate the dentists who have been working so hard through the new contract.

Joan Ryan: Availability of NHS dentists in Enfield is not our problem. In fact, there will be an 8 per cent. increase in the coming year, but there is a shortfall in uptake. It is a small shortfall, but none the less it is there. My PCT is going to run a major advertising campaign in the new year to deal with the matter, but constituents tell me that they are not entirely clear what they are entitled to and what it might cost them. Can I suggest that the way in which we communicate with constituents on such matters should be a major part of the review?

Ann Keen: I thank my right hon. Friend for her comments on behalf of Enfield. We have to look to PCTs, so many of whom are very imaginative in their advertising and in their use of communication skills, to encourage the best to help the rest. I believe that world-class commissioning will help in that process.

Gregory Campbell: Although health is a devolved matter in Northern Ireland, what steps can the Minister take in conjunction with other Health Ministers right across the UK to ensure that newly qualified dentists take on NHS patients, and that they do so in rural areas and in less populous areas, where the difficulty is more acute?

Ann Keen: We are increasingly looking at how we can share best practice with the devolved Parliaments, because we can learn so much from each other. Our new students coming out of dental school are showing a great willingness to work throughout areas, particularly where health inequalities exist, which tends to be more in rural areas because of issues of access.

Rob Marris: Telephone services have an effect on access to NHS dentistry and to GPs. What is the NHS doing to cut back on the very regrettable but widespread use of 084 telephone numbers, which cost patients extra money? It is a scandal throughout Government, with thousands of 084 numbers being used, including a lot in the NHS. What are the Government going to do about that?

Ann Keen: I thank my hon. Friend for that topical point. We have announced and launched a public consultation today on this issue, which is due to run until 31 March 2009. It will inform the Government's decisions on the future of such numbers in the NHS. I certainly share my hon. Friend's concern about those actions, as do the ministerial team.

Michael Penning: The British Dental Association will be fascinated by what the Minister said earlier about working with it. This contract was imposed on dentists even though the BDA warned that it would not be any good for British dentistry. Also, a Minister was invited to this year's BDA national conference, but no Minister turned up, even though one was on the train going to Manchester when I was travelling to speak at the event. I know that we will debate this important issue later, and we have had an excellent report from the Health Committee, but can the Minister explain why she thinks things are going so well when 4,000 patients a day are not able to see an NHS dentist?

Ann Keen: On the point about the conference and meetings with the BDA, the chief dental officer and I have regular meetings with the BDA, and the consensus around the table is to work together, which I suppose would be alien to the hon. Gentleman. Working together in partnership with professional organisations that represent health workers right across the board comes naturally to Labour Members, and it will always continue to do so.

Vioxx

Tim Farron: Whether he plans to meet Merck, Sharpe and Dohme to discuss compensation for those affected by Vioxx.

Phil Hope: I have no such plans. The then Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis), met representatives of the company on 10 July 2008 and conveyed to them the concerns expressed by Members.

Tim Farron: I thank the Minister for his answer. My constituent, Mr. David Jones of Elterwater, is just one of the many hundreds of innocent UK victims who have suffered severe health problems as a result of taking the anti-arthritis drug Vioxx. Following the landmark victory of Les Thomas in last week's court case in Cambridge and the $4.85 billion settlement already paid to American victims by Merck and Co., will the Government now put pressure on Merck to ensure that all patients whose health has been damaged by Vioxx are given the compensation they deserve?

Phil Hope: The hon. Gentleman knows that this is a very complex issue, and I have every sympathy with those UK patients—including his constituent whom he has mentioned—who believe that they have been adversely affected by Vioxx. As the hon. Gentleman knows, I cannot comment on individual cases, but I understand that the case he mentioned is not related to the matter concerning cardiovascular disease. It would be inappropriate for Ministers or Government officials to intervene in, or comment on, any current or potential claims for compensation from the company in question in this country, as they are properly for the legal system. However, patients who believe they have a case are not prevented from taking a test case to a court of law.

Anne Begg: I wonder where the Minister draws the line on patient responsibility when they may know the potential dangers of a drug but still wish to take it because it is effective. I should declare an interest: I took Vioxx and I found it wonderful. It probably caused an ulcer, but I still agreed with my doctor to continue to take it because of its effectiveness, despite knowing of the risks. It was then withdrawn, so I could no longer do that. Vioxx is not the only such drug; there is also co-proxamol, for example, which has been withdrawn from use, too. It is difficult for people with arthritis or joint pain to find an effective analgesic, because the ones on which they have come to rely have been withdrawn. Nevertheless, many such patients would accept the risks involved in taking those drugs and still take them.

Phil Hope: My hon. Friend speaks with great personal experience, and her question illustrates the complexity of these matters. It must, therefore, be right for it to be up to individual patients who believe that they may have been adversely affected in any such circumstance to make their own decisions about claiming for compensation and pursuing that through the legal system. It is certainly not appropriate for the Government to try to bring pressure to bear on an individual company in the circumstances my hon. Friend describes. These must be matters for clinicians and individual drug companies to decide, and it is for the National Institute for Health and Clinical Excellence to make recommendations as appropriate.

Norman Lamb: The Minister's predecessor took a rather different view, and four years ago  The Lancet concluded that:
	"The licensing of Vioxx and its continued use in the face of unambiguous evidence of harm have been public health catastrophes."
	This year, a leading US American journal claimed that Merck had drafted "dozens of research studies" on Vioxx and then got prestigious doctors to put their names to them—there was ghost-writing, in other words—and had misrepresented data. Given that most of the 400-plus victims of Vioxx in this country were NHS patients, is it not incumbent on the Government to intervene in this scandal and demand that Merck treats British victims in exactly the same way as US victims have been treated in the $4.8 billion settlement from which they have benefited?

Phil Hope: I understand the concerns of the hon. Gentleman and other hon. Members. My predecessor met a parliamentary delegation on the matter only this July, so representations have been made. I must emphasise to the hon. Gentleman that it is not appropriate for Ministers or for Government to intervene in, or comment on, a potential claim for compensation that might be carried out in this country and that is properly a matter for the legal system to address. I repeat to him that the Government do not have any ability to bring sanctions to bear on the company that he is describing. If patients believe that they have a case, they are not prevented from taking it forward in a court of law in this country.

Prescribing Costs

Edward Leigh: How much the NHS has saved through more efficient prescribing in the past 12 months.

Phil Hope: Annual growth in primary care prescribing costs in the year to March 2008 was 1 per cent. That is set against a 5 per cent. increase in the number of prescription items dispensed. Unfortunately, it is not possible to attribute a specific cash sum to more efficient prescribing, because variables, such as the cost of the drugs themselves, will affect the savings that are made by primary care trusts. I think that the hon. Gentleman can see that there has been some progression in efficient prescribing over the past year or so.

Edward Leigh: The Minister may recall that in its 2007 report, the Public Accounts Committee recommended, and the Government accepted, that more than £200 million a year could be saved for the NHS by prescribing generic drugs, rather than branded ones, without any adverse effect on patients. Has that target of £200 million been achieved? Which PCTs have made the most progress and which have made the least progress? If he does not have the information to hand, he may write to me.

Phil Hope: The PAC report was very helpful, and I am grateful to the hon. Gentleman's Committee for the work that it has done. The health service pays an £8 billion drug bill at the moment, so I am pleased to be able to tell him that PCTs are making considerable progress. Generic prescribing has increased from 51 per cent. in 1994 to 83 per cent. in 2008—that is the highest rate in Europe. He will know that PCTs are independent bodies and that they make their own decisions about these matters, but we have issued guidance to PCTs. Although it is ultimately for them to decide, the practice-based commissioning that we have seen and other guidance that we have issued is definitely driving the NHS forward in the right direction, towards the more efficient prescribing of drugs.

John Mann: Five thousand of my constituents have written to the Minister, via me, asking that their general practitioners be allowed to continue dispensing. Will he take heed of this Bassetlaw common sense?

Phil Hope: My hon. Friend has been at the forefront of the campaign on the issue of dispensing by doctors. We are analysing the responses to the consultation on pharmaceutical provision in England, and we will be making an announcement on these wider issues as soon as possible in the new year. I am aware of the strength of the responses we received on the various options for amending the criteria for dispensing by doctors. We have taken into account the views of those attending the listening events, the meetings and so on, and as a result I am pleased to announce to him that there will be no change to the current arrangements on GPs dispensing medicines to their patients.

David Tredinnick: Building on the remarks made by my hon. Friend the Member for Gainsborough (Mr. Leigh), does the Minister accept that if his June steering group report recommendation that there should be statutory regulation were implemented for complementary medicine, herbal medicine and acupuncture, that would create further downward pressure? That is because doctors would be prepared to refer to these practitioners, who charge a lot less, and, thus, the cost to the health service would be less.

Phil Hope: I thank the hon. Gentleman for his question; I shall certainly consider the contribution that he is making and write to him on the particular point that he raises.

Eric Illsley: Has my hon. Friend considered the wastage of drugs through inefficient prescribing, especially in relation to free prescriptions? Many people accept the drug offered on the prescription, but do not use it. Even though the drug is unused and still in its original packaging, it cannot then be used and has to be destroyed. That loses the NHS a huge amount of money.

Phil Hope: I understand my hon. Friend's concerns and those of other hon. Members who have written to me about wastage. We are all concerned about wastage caused by unused medicines. The difficulty is that the recycling of medicines in the way that he and others have suggested is regarded as unethical and unsafe according to the code of ethics produced by the Royal Pharmaceutical Society. Indeed, some hon. Members have suggested that we could donate unused drugs to other countries, but the World Health Organisation guidelines state that no drugs should be donated that have been issued to patients and then returned to pharmacies. I understand the concerns about wastage, but we must take clinical matters into account when making decisions.

Andrew Murrison: The Government have shown themselves willing to qualify the autonomy of primary care trusts when they feel it necessary to do so. Why then are they ignoring the huge disparity between the best and worst performing primary care trusts in the drug-prescribing habits of their practitioners and the related costs?

Phil Hope: I referred to that matter when I answered the question asked by the hon. Member for Gainsborough (Mr. Leigh). We are drawing the attention of primary care trusts to the value of more efficient prescribing commissioning, and—as I said—generic prescribing has increased from 51 to 83 per cent. We are making excellent progress and I hope that PCTs, autonomous bodies as they are, will none the less take notice of the guidelines that the Government have issued, which will ensure that we have more efficient drug prescribing in future.

Accident and Emergency

Gordon Prentice: Whether any of those accident and emergency departments redesignated as urgent care centres have subsequently been reinstated as blue light accident and emergency departments.

Ben Bradshaw: Not as far as we are aware. It is up to the local national health service to ensure that urgent and emergency care meets national performance requirements as well as reflecting local needs.

Gordon Prentice: That is a disappointing reply. The transfer of blue light accident and emergency from Burnley to Blackburn has been a running sore for more than a year. Given the present capacity problems at the Royal Blackburn hospital, ambulances are again taking patients back to Burnley. Why cannot we reinstate our accident and emergency at Burnley general hospital, if necessary with a published protocol indicating where patients should be taken with their various injuries and conditions, whether it be to Burnley, Blackburn, Preston or even Manchester?

Ben Bradshaw: I am nervous about intruding on what I understand to be the historic but friendly rivalry between Blackburn and Burnley. Seriously, however, I understand the organisation of services there to be a result of what clinicians felt would be the best way to concentrate specialist accident and emergency care in Blackburn and elective planned surgery in Burnley, which would avoid some of the cancellation problems that his local hospital was experiencing because of the need to deal also with accident and emergency cases. My hon. friend will also be aware that the democratic check on those organisations—in his case, the Lancashire overview and scrutiny committee—strongly supported the proposals. The recent problems that he mentions happen in many accident and emergency services when there are particular, localised and sudden pressures, and they are not peculiar to the reorganisation to which he refers.

Nicholas Winterton: Could the Minister confirm that the urgent care centres are in addition to accident and emergency provision, and not in place of it? The care centres are a better use of the expensive professional staff—doctors and consultants—instead of a way to close accident and emergency services. People who would have automatically gone to accident and emergency are being transferred to a more appropriate form of treatment.

Ben Bradshaw: Yes, the hon. Gentleman is absolutely right. The decision at local level is made on a case-by-case basis, but he is right to draw attention to the benefits of urgent care centres in reducing the pressure on, and unnecessary referrals to, accident and emergency departments.

David Drew: I hear what my hon. Friend says. One of the most difficult aspects of the way we now treat accident and emergency departments is how they must lock in carefully with the ambulance service. One of the continuing problems in Gloucestershire is the number of times that ambulances back up in the car parks of our two main acute centres. Is it not time to look at how the ambulance service operates in relation to accident and emergency, and consider ways we can improve that operation?

Ben Bradshaw: Let me say loud and clear to the trusts, through my hon. Friend and any other hon. Members who experience that problem, that it is totally unacceptable for ambulances to back up either because they are being forced to do so by the accident and emergency department or because the ambulance service has decided to do so. I am sure he is aware that the clock starts ticking on the four-hour maximum wait 15 minutes after the ambulance arrives. Any accident and emergency department that thinks it can fiddle its achievement of the four-hour figure by keeping ambulances stacked up outside the hospital is wrong. That message has gone out loud and clear many times from this Department and I am happy to repeat it in the House today.

Stephen Dorrell: Will the Minister confirm that when making decisions about the structure of emergency care in the years ahead, it will be increasingly important to take account of not only the evidence on how to achieve the best clinical outcomes but the resource implications of the different structures of emergency care? The Government have been signalling for some time that the rate of growth of cash available to the health services is going to slow down. In the pre-Budget report, the Chancellor made it clear that spending cuts were intrinsic to the Government's plans. Against that background, is it not important to begin to manage expectations about the structure of emergency care that is likely to be delivered by the health service in the years ahead?

Ben Bradshaw: "Lower increases" would, I think, be a more accurate description of future spending projections. Of course, last week we announced annual increases of 5.5 per cent. and 5.5 per cent. for PCTs in each of the next two years. There will be lower increases from the Government, but there would be cuts from the Opposition, were they to get into government.
	The right hon. Gentleman is absolutely right, and I commend the thoughtful remarks that he made at the King's Fund discussion either today or yesterday, which I read. He is right to say that high-quality care is often the most cost-effective care. There is no doubt—this is the pattern not just in this country but in other countries around the world—that when it comes to accident and emergency services it is safer, better and more effective to concentrate care in a smaller number of specialist units. It is often better for in terms of survival rates and health outcomes people to travel a little bit further to those specialist units.

Richard Taylor: In view of the confusion that still exists among patients about whether they should go to accident and emergency, urgent care centres, minor injuries units or the out-of-hours GP centre, will the Minister tell us what progress he is making in establishing a single telephone number, less than 999, that would be relevant to each area and would direct every patient down the appropriate pathway for their area?

Ben Bradshaw: Very good progress, I am pleased to tell the hon. Gentleman. However, he will have to be a little more patient before we make a formal announcement.

Stephen O'Brien: Will the Minister find time before Christmas to go to Enfield and tell the people there why they do not need an accident and emergency department at Chase Farm hospital and why it will be replaced by a non-blue light service at the urgent care centre? The most recently published report by the experts, the College of Emergency Medicine, concluded:
	"There is no evidence of the clinical or financial benefits"
	of the urgent care centre model, and that the Government's proposals are
	"clinically unproven and against the principle of patient choice of access to proper emergency care."
	In the light of those statements, will the Minister and the Secretary of State reverse their decision to replace accident and emergency services at Chase Farm with an urgent care centre?

Ben Bradshaw: The hon. Gentleman is aware—or at least he should be—that there is a potential legal challenge, if not an active legal challenge, to that case. I shall therefore not comment on his specific point. He will be aware that the proposals in north-east London have been through the democratic check of both the overview and scrutiny panel and the independent reconfiguration panel. Everybody—including the four primary care trusts, most of which cover boroughs with Conservative majorities—is agreed that the proposals are the best solution for the north-east London health economy.

North Yorkshire and York PCT

Hugh Bayley: What recent assessment he has made of the financial position of the North Yorkshire and York primary care trust; and if he will make a statement.

Ben Bradshaw: My right hon. Friend the Secretary of State was pleased to announce last week that North Yorkshire and York primary care trust will receive an 11.6 per cent. increase in funding over the next two years. That places my hon. Friend's primary care trust in the top quarter of increases in allocations.

Hugh Bayley: I have been arguing for years that the North Yorkshire and York PCT did not get enough money to meet the health needs of the large number of elderly people who live in what is a largely rural area, so I congratulate the Government on changing the funding formula to put that right. I am pleased that the PCT will get larger increases than the national average in future, but will the Minister do everything he can to ensure that it clears its deficit as soon as possible? That will ensure that this large amount of extra money will be used to provide new and better health services for patients, and not to clear historical debts.

Ben Bradshaw: Yes, and I am delighted that my hon. Friend's persistent and effective lobbying on behalf of his local PCT has paid off. He will be aware that the PCT has gone through some difficult personnel issues, which are now being addressed. It is working very closely with his regional strategic health authority to ensure that the challenges to which he refers are overcome as quickly as possible.

Anne McIntosh: Although I welcome the additional expenditure, will the Minister tell the House for how long the extra money will be available, and does he accept that the funding formula has to change? Per patient, the PCT and the individual hospital trusts have been receiving much less than the average, so will he review the patient formula? Will he reintroduce the factors that reflect the sparsity and rurality of the population because, as the hon. Member for City of York (Hugh Bayley) suggested, our ageing population lives in deeply rural areas?  [ Interruption. ]

Ben Bradshaw: Exactly, we have just done that—the new formula has been changed to take into account elderly populations, and that is why the hon. Lady's PCT has benefited so dramatically from the increase in funding. She asks how long the funding formula will apply, and I can tell her that it is for the next two years. At the end of that period, her PCT will still be 2.4 per cent. below target, but that is a good position for it to be in as it will then have more catching up to do. However, it is far less likely to catch up under a Conservative Government, as her party is committed to cutting spending on health.

Robert Goodwill: Will the Minister review the role of patient referral units? They cajole patients to take up operations at the Capio private hospital in York, even though many would otherwise choose to have their operations in Scarborough.

Ben Bradshaw: It is interesting to hear a Conservative Member running down the use of the private or independent sector in health care. No one is being cajoled to go into the Capio centre, but people are being offered a choice. I thought that Conservatives were in favour of choice.

Topical Questions

David Drew: If he will make a statement on his departmental responsibilities.

Alan Johnson: The responsibilities of my Department embrace the whole range of NHS social care, mental health and public health service delivery, all of which are of equal importance.

David Drew: May I congratulate the Department on its foresight in supporting the local campaign to reuse the Standish hospital site in my constituency? It would appear that in January we are to get the good news that the site will be transferred back to the PCT, and we look forward to the development of a fully integrated care setting there. There have been two obstacles to the campaign's progress: my hon. Friend the Minister will know about the security issues with the site, but I am pleased to say that the listing of block C seems to have been sorted out. Will he ensure that this wonderful proposal sees the light of day, and will he give every support to the PCT so that it can see it through?

Ben Bradshaw: Yes, and let me commend my hon. Friend for his active interest in this matter. He is right to point out that the two remaining blockages to progress have been removed: the Department for Culture, Media and Sport has decided not to list block C—having visited the site with my hon. Friend, I believe that that is a very sensible decision. In addition, problems to do with security and vandalism have been sorted out, and I look forward to an announcement that he will be pleased with being made in January.

Hugo Swire: I recently chaired a seminar on Lyme disease in Westminster Hall, and two things became clear—that diagnoses of people suffering from Lyme disease are on the increase, and that sufferers are beginning to encounter the same scepticism that people with other chronic fatigue syndromes such as ME have been subject to. Will the Under-Secretary of State for Health, the hon. Member for Brentford and Isleworth (Ann Keen), address that matter? What instructions can she give to GPs to ensure that they treat more seriously the symptoms of long-term sufferers from Lyme disease?

Ann Keen: May I congratulate the hon. Gentleman on the work that he is doing on Lyme disease, and indeed other hon. Members who have shown an interest in that relatively new disease? Guidance on the diagnosis and treatment of Lyme disease is provided to general practitioners and other clinicians by the Health Protection Agency and is published on its website.

Christine Russell: My right hon. Friend the Secretary of State will be aware that more than 90 million working days are lost in Britain every year through mental health issues such as stress, anxiety and depression. Many employers do not quite know what to do about mental health problems, so may I invite him to look at the innovative work being developed by the Cheshire and Wirral Partnership NHS Foundation Trust, together with local employers across Cheshire and the Wirral, which is having significant results? In particular, I point out the partnership between the trust and Airbus; their work has resulted in a 20 per cent. reduction in staff absences at Airbus.

Phil Hope: I am very grateful to my hon. Friend for drawing to my attention, and the attention of the House, the excellent work done by Cheshire and the Wirral, and the scheme involving Airbus, which she identified as working very well. She is quite right; there are issues to do with mental health and employment that need to be addressed. She will know that we launched a consultation on the subject earlier this year, and a report on the issue is due in the spring. Dame Carol Black is chairing a steering group that is looking into how mental health provision can be better tailored and integrated to help people to find, stay in or return to work. I will certainly draw to the steering group's attention the excellent work that my hon. Friend describes in her constituency.

Andrew Stunell: Will the Secretary of State agree to take an urgent look at the perverse effects of the NHS's so-called choose and book system, which my constituents think should be renamed confuse and book? My local primary care trust is so fed up that it now routinely explains to my constituents that the system is nothing to do with it. It is certainly nothing to do with general practitioners, who often end up making the bookings on behalf of my bemused constituents, who cannot work their way through the system. Choose and book is certainly not helping my constituents, the overwhelming majority of whom would rather go to the local district hospital, Stepping Hill, than have what often turn out to be illusory offers of treatment elsewhere. Do Ministers accept that choose and book is putting at least three extra leaps between the consultant and the patient, and that the matter needs to be tackled urgently?

Mr. Speaker: Order. If the hon. Gentleman ever wishes to apply for an Adjournment debate, I guarantee that he will get one, but I need questions to be brief.

Ben Bradshaw: No, we do not accept what the hon. Member for Hazel Grove (Andrew Stunell) says. I am afraid that it is the responsibility of his local primary care trust and GPs to manage the system efficiently and competently, as most primary care trusts and GPs across the country do, to the great benefit of their patients.

Kevin Barron: Will my right hon. Friend the Secretary of State confirm that the introduction of GP-led health centres will improve access to GP and primary care services, 12 hours a day, seven days a week, and that such health centres do not threaten well-run, easily accessible village surgeries?

Alan Johnson: I shall be very pleased to confirm that. Indeed, Bradford—not too far from my right hon. Friend's constituency—had the very first GP-led health centre, which I opened on 28 November. There, we found that people can drop in at any time. They are guaranteed not to wait more than half an hour, even if they have not got an appointment. The contract was given to a fabulous social enterprise formed by GPs in the area who are doing excellent work throughout Yorkshire. Such health centres are about improving access and increasing the capacity of primary care, so it remains totally mystifying why the Conservative party opposes those new services.

Henry Bellingham: Is the Secretary of State aware that there has been a very serious outbreak of norovirus at the Queen Elizabeth hospital in King's Lynn? Wards have been closed and all non-urgent operations have been cancelled. Obviously, the problem comes at a bad time for the hospital, as it is trying to pay off its historical debt. The problem could well have an impact on waiting lists and affect the hospital's finances. What advice could and does the Secretary of State give to hospitals in that position?

Ben Bradshaw: Hospitals should know what to do in that position. This is not a new problem—as I am sure the hon. Gentleman is aware, it happens regularly at this time of year—and our latest understanding from the Health Protection Agency is that it is less bad this year than in previous years. However, it is important that hospitals take swift and immediate action and it is important, too, that people, not least hon. Members in the House, should not spread undue alarm by, for example, comparing this to health care-associated infections, the implications of which can be fatal.

David Kidney: Will the Secretary of State confirm that the incidence of health care-acquired infections such as MRSA and C. difficile is down in 2008? Does he agree that at this time of welcome reductions it is all the more vital that all parts of the NHS remain focused on maintaining those clinical practices, standards of cleanliness and public education to drive out those infections completely?

Ann Keen: My hon. Friend is absolutely right. We have halved MRSA bloodstream infections across England, hitting our target, and we are making excellent progress towards the 2010-11 target to reduce C. difficile infections by 30 per cent. However, we must continue to drive that forward and drive home the message, not just with health professionals but with the public at large, and I am extremely happy that all our people are working all the time to make sure that that happens.

Andrew Rosindell: Will the Minister explain to my constituents in Romford and the London borough of Havering why the operating framework from the Department of Health for 2009-10 does not give priority to the health and well-being of our increasing ageing population?

Alan Johnson: The operating framework that we issued this year has been well received in the NHS. We have ensured that instead of trying to prioritise everything, and thus prioritising nothing, we have focused attention on health care acquired-infections, which are a huge issue for older people, particularly the over-65s; on dementia; and on greater patient involvement. Those priorities all apply to older people. The dementia strategy, which we will shortly publish, is of particular benefit to older people, as is the debate on the reform of adult social care which, although not restricted to the over-65s, is very much the focus of that report.

Tony Baldry: It would be churlish to allow 2008 to close without thanking the Secretary of State for accepting in full the recommendations of the independent reconfiguration panel regarding Horton general hospital, and a lot of work has been done to try to balance accessibility issues and safety. May I trespass on the seasonal mood of good will to point out that the Leader of the Opposition, the shadow Secretary of State for Health and at least three members of the shadow health team all visited Horton general hospital in 2008? May I invite the Secretary of State or one of his team to come to visit the Horton general hospital in Banbury at some stage in 2009, so that when he considers these issues he can visualise the balance that we are trying to strike?

Mr. Speaker: Order. Once again, in topical questions, questions should be brief, not long. Short and sharp—that is the idea.

Alan Johnson: I thank the hon. Gentleman for his comments. What happened with Horton hospital was verification of the process, and the independent reconfiguration panel made those decisions on the basis of the clinical argument. I should be glad to visit the hospital, but I do not believe that I have ever received an invitation. Usually, I depend on an invitation before I pop up, so it would be nice to receive one.

Ben Chapman: Can the healthy schools programme be revised, so that medicine policies and support systems for children with diabetes and other long-term conditions are taken fully into account?

Ann Keen: We are committed to improving diabetes care for children and young people, including the way in which the condition is managed in schools. The national clinical directors for children and for diabetes are working together to look at how to support the NHS to improve the way it cares for children with diabetes and other long-term conditions.

Andrew Lansley: The Secretary of State will know that the NHS Information Centre provided to 10 Downing street information from hospitals about people presenting with knife wounds—data that were unpublished, not yet validated and incomplete. That was done on the basis that the information would not be used publicly in that form. Can the Secretary of State tell the House whether he knew about 10 Downing street's intention to use those data and, whether he did or not, what steps he personally is taking to make sure that NHS data are not used for partisan purposes in that way?

Alan Johnson: I have nothing to add to the Home Secretary's comments yesterday, particularly her apology for what happened. The hon. Gentleman has written to the Information Centre and made a number of points, all of which will be answered in due course.

Tony Lloyd: Are my right hon. and hon. Friends aware of the campaign by thalidomide survivors, who make the point that that increasingly elderly population who were victims of a great tragedy many years ago are now beginning to suffer the ill-health effects of ageing? How do the Government intend to respond to their aspiration for proper recognition of their plight?

Phil Hope: There is, of course, huge sympathy across the House for individuals and families affected by thalidomide. My hon. Friend will know that a private compensation settlement was arranged many years ago—this is the 50th year, I think, since the tragedy occurred. In addition to the annual payments to victims, those affected by thalidomide will continue to benefit from ongoing improvements to health and social care in the circumstances that he describes, particularly the developments that we are introducing to help people with disabilities to get better social care. There have been substantial increases in the level of funding provided for health and social care services in recent years, and thalidomide survivors and their families will benefit from those services over the years ahead.

David Evennett: Figures given to me by the Minister in a written answer show that alcohol-related finished admissions to hospital in Bexley have increased by more than 70 per cent. since 2002. Does that not show that Government policies on tackling the public health problems caused by alcohol are not working, and why we need our vital accident and emergency hospital department at Queen Mary's in Sidcup?

Alan Johnson: On the hon. Gentleman's final point, I understand that the independent reconfiguration panel is considering the matter. On alcohol issues, the hon. Gentleman makes a serious point. The number of admissions as a result of alcohol is increasing. If one looks at the reduction in premature deaths from heart disease, cancer and cardiovascular disease against the increasing trend in diseases caused by too much alcohol, one realises there is a very real public message to get across. That is one of the reasons why, the week before last, the Home Secretary announced that she was taking measures to ban the promotions that lead to a large consumption of alcohol in a very short time such as "women drink free" and happy hours on which there will be restrictions. We need to look much more closely at how we introduce other public health messages so that people are aware that consuming too much alcohol is a real and dangerous health risk.

Speaker's Statement

Mr. Speaker: Now that the House has concluded the debate on the Queen's Speech, I wish at the start of the Session to make a brief statement about the duties and responsibilities of Members.
	Our ancient privileges allow us to conduct our debate without fear of outside interference. In particular, we enjoy freedom of speech, both in Committee proceedings and in debates on the Floor of the House. Parliamentary privilege is essential for proper democratic debate and scrutiny, but it should be exercised responsibly.
	It is up to each one of us to ensure that, as individuals and collectively, we do not misuse the rights that we have. They should be exercised in the public interest. We must ensure that we follow the letter and spirit of the code of conduct and related rules that we have approved to regulate our business.
	Each Member is here to represent the views of his or her constituents and to participate in the process of democracy. We should ensure that every Member is heard courteously, regardless of the view that he or she is expressing. Every member of the public has the right to expect that his or her Member of Parliament will behave with civility, in the best traditions of fairness and with the highest level of probity and integrity.
	I turn now to security, not only for Members of Parliament but for the staff of this House, who work so hard on our behalf, and for those who are pass holders. I expect every Member of the House to co-operate fully with those officials who are responsible for the security that ensures that our democratic process is not disturbed and that visitors to Parliament can continue to be made welcome. While the work of the Boundary Commission continues, hon. Members have a duty to look after the constituents who elected them. The boundaries do not change until the next election, so we must obey the convention of not involving ourselves with another Member's constituency until after that time.

Peter Kilfoyle: On a point of order, Mr. Speaker.

Mr. Speaker: The point of order must come after statements, and we have a few statements to hear.

Royal Mail

Patrick McFadden: I wish to repeat a statement made a little earlier by my noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform about the Royal Mail. The Government are firmly committed to a universal postal service—that is, the ability of the 28 million homes and businesses across the country to receive mail six days a week with the promise that one price goes everywhere. The universal service helps to bind us together as a country. As well as having social importance, it is the means by which many companies build and operate their businesses. However, it does not come free.
	Last December, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), the then Secretary of State for Business, Enterprise and Regulatory Reform, invited Richard Hooper to lead a full independent review of the postal services market. Its purpose was to look ahead to the future and recommend the steps needed to sustain the universal service in a world where technology, consumer behaviour and the communications market are all rapidly changing. The review did not cover the post office network. We have now received Richard Hooper's final report. It is a serious, wide-ranging study and makes sober reading. We are publishing it this afternoon, and I am grateful to Richard Hooper, Dame Deidre Hutton and Ian Smith for their work on it.
	Let me set out Hooper's analysis of the challenges facing the Royal Mail. First, there has been a revolution in communications technology in the past decade as consumers have turned to e-mail, the internet and text messages. In this country, 60 billion text messages were sent last year, and we now send 5 million fewer letters per day than two years ago. Hooper is absolutely clear that the main challenge to the Royal Mail comes from the impact of changes in technology and consumer choices. His estimate is that last year the shift from mail to those new technologies cost the company £500 million in lost profits—that is five times the impact of business lost to other postal companies in our liberalised market. The message is therefore clear: making those other companies go away is not the answer to make the Royal Mail succeed. Royal Mail's success matters because it is the only company capable of delivering mail to every address in the UK, six days a week. As Hooper makes clear, that will be the case for the foreseeable future, so a healthy Royal Mail is vital to sustaining the universal service.
	The second challenge that Hooper describes is that of efficiency. Hooper reports that Royal Mail is less automated and less efficient than its western European counterparts. In modern European postal companies, 85 per cent. of mail is put in walk order by machine for delivery to the individual home or business. By contrast, in British local delivery offices, that is still done entirely by hand. The Royal Mail urgently needs to catch up and modernise.
	The third challenge is the pension fund. Hooper warns that Royal Mail has a large, growing and volatile pension fund deficit. That is near impossible for the business to manage, and it is a huge demand on its revenues. Each year, on top of its regular £500 million contribution to the pension fund, the company is having to find an extra top-up of £280 million to plug the deficit. These payments look set to rise substantially when the fund is re-valued next year.
	Fourthly, Hooper says that labour relations in the company need to improve. We know that levels of trust and co-operation are low and that industrial action takes place too often, and a fresh start in industrial relations is badly needed. Fifthly, there is regulation. Hooper reports a lack of trust in the relationship between the company and the regulator. There are disagreements about even basic information and those tensions divert energy from the chief challenge of modernising the business.
	Overall, Hooper's conclusions are crystal clear: the status quo is untenable, the universal service is under threat, and we face the choice of either downgrading the universal service as we manage decline, or acting now to turn things around and secure Royal Mail's future.
	At the heart of the Hooper report are three linked recommendations. First, Hooper recognises that the pension fund deficit represents a significant challenge for the company. The report recommends that as part of a package of changes, the Government should take over responsibility for substantially reducing the pension deficit. I stress that Hooper says that that would be justified only as part of a coherent package to secure Royal Mail's long-term viability. Secondly—and closely related to that—to improve its performance, Royal Mail should forge a strategic minority partnership with a postal operator with a proven record in transforming its business, working closely with the work force. Hooper believes that that would give Royal Mail the confidence, the experience and the capital to make the changes needed to improve performance and to face the future—in other words, save the Royal Mail by investing in its future.
	Finally, on regulation, Hooper proposes that Ofcom should take over responsibility from Postcomm for regulating the postal market. Its primary responsibility would be to maintain the universal service in the wider context of other changes taking place in the communication markets. My Department will study the report in detail and we intend to respond with a full statement of policy in the early part of next year. With backing from the Government, Royal Mail has been improving performance in recent years, but progress has been too slow, and Hooper makes it clear that, in the face of the challenges confronting the company, transformation must be faster and more far reaching.
	The Government agree with Hooper's analysis and recommendations. As he does, we reject cutting back the universal service; indeed, we share his ambition for a strong universal service and a strong Royal Mail. We intend to take forward the recommendations as a coherent package of measures. We will fulfil our manifesto commitment to
	"a publicly owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment".
	Bringing in a partner through a minority stake in Royal Mail's postal business will help us to deliver that goal. It will bring Royal Mail fresh investment and new opportunities to grow in Europe, and enable it to offer new services. It will provide a fresh new impetus to modernising the Royal Mail and to securing the universal service.
	We and the Royal Mail have already received one expression of interest from the Dutch postal company, TNT, to build such a partnership. I very much welcome that approach from an experienced postal company, just as I will welcome other expressions of interest from credible partners should they come forward. My Department will pursue that in the coming weeks.
	Finally, I should comment on the Post Office, which was not part of the review's terms of reference. The network of local post offices combines a unique set of commercial, public and social roles. In recognition of that, a partnership would not include the post office network. However, a healthier Royal Mail letters business will be good for the Post Office, and today's announcement will help underpin our existing commitment to the post office network. We are providing £1.7 billion until 2011 to support a network of around 11,500 branches. We will continue to support the non-commercial network beyond that time. The House will recall the recent announcement that the Post Office card account will stay with the Post Office. We will now build on that decision, to ensure a stable and sustainable network for the future. We are determined to have a post office network offering a broad range of services throughout the country, supporting both social and financial inclusion. I am delighted that the Select Committee on Business and Enterprise has agreed to undertake an inquiry into what further services the Post Office could offer.
	I believe that Royal Mail and the postal market can thrive in the future, provided that decisive action is taken now. Without far-reaching change, the opportunities brought about by technology will become overwhelming threats. That need not be the case. I believe that there are benefits for everybody in the package of measures that we intend to take forward. It will protect the universal service for consumers and give Royal Mail new opportunities to modernise and develop; it offers Royal Mail's staff a future in a modern, efficient postal operator, with more secure pension arrangements; and it offers the whole country a Royal Mail that we can be proud of. I commend this statement to the House.

Alan Duncan: May I thank the Minister for sight of his statement?
	We welcome Richard Hooper's report, which confirms what everyone has known for a long time. Royal Mail's working practices are inefficient, competition is intensifying, industrial relations are poor and sorting machinery is outdated. The fixed price of a stamp and Royal Mail's huge pension deficit seriously limit its room for manoeuvre. All that has been clear for a decade, but the Government have done little to curtail a precipitous decline in Royal Mail's fortunes. Today we learn that the Government are trying to strike a deal to see them through the next election. They are trying to look like the saviour of Royal Mail, but are doing so in flagrant breach of their election manifesto and by raiding the pension fund to bail out Government borrowing.
	Even though the Minister's own party does not seem prepared to do so, we on the Conservative Benches broadly welcome his intention to introduce a new commercial partner. It is a step in the right direction, but the details remain unclear. Will the Minister confirm the status and details of the plans? What will private partners be offered in exchange for their investment? Will he demand a commitment from them to invest in new sorting technology? Can he confirm whether the opportunity to buy a stake in Royal Mail will be put out for competitive tender? By what commercial method might he sell a stake, believed to be about 30 per cent., and can he guarantee that all the revenues from any sale will go directly to Royal Mail and not to the Government?
	The Government have had more than 10 years to deal with the problems that Hooper identifies, but they have completely failed to do so. In his first attempt as Business Secretary, Lord Mandelson said that the Government's policies would
	"lead to greater investment in and strengthening of the local post office network, resulting in improved services to ordinary people in every part of the country,"
	adding:
	"Everyone stands to be a winner".—[ Official Report, 7 December 1998; Vol. 322, c. 24-36.]
	Since then, almost 40 per cent. of all post offices have closed. Rather than creating innovative solutions to the problems facing the business, the Government have concentrated on managing its decline.
	During those 10 years, the Government could have cut costs, done deals, forged partnerships or even, as they are now doing, part-privatised the business. However, until now, they have done none of these things. They have not driven through efficiencies in Royal Mail management; they have not invested in new technology; and they have not dealt conclusively with the pensions deficit. So just as the Government have wasted 10 years mismanaging the country, they have also wasted 10 years mismanaging Royal Mail.
	Now, disguised in today's statement, is the truth. The Government intend to raid the pension fund in order to plug the black hole in the public finances, dumping the cost of a multi-billion pound liability on future generations. The seizure of £22 billion from Royal Mail's pension fund would make the Government's woeful borrowing figures look a little better, but it would saddle future generations with an almost open-ended bill. The whole process has been engineered to make a quick buck for the Prime Minister, kill the issue until after the next election and pass the biggest financial problem not only to the next Government, but probably to those who follow them. In order to asset-strip, the Government have decided that if there is not quite enough in the pot, they might as well swipe the whole pot.
	Can the Minister tell us what he estimates the long-term annual pensions liability to the taxpayer to be? Will Royal Mail's pensions liability be included in the Government's borrowing figures? What exactly will happen to the £22 billion that is currently in the pension fund? Will the Minister keep the fund intact and top it up, or not? Has he been assured that such action would comply with European Union state aid rules?
	The other issue is the unions. Royal Mail workers are already planning strikes. What does the Minister expect will be their reaction to today's proposals? We believe that any restructured ownership package must include the full involvement and incentivisation of the staff. What will the pension terms and conditions be for future joiners and for agency workers? Thousands of post offices have already closed; large-scale sorting office closures would be a further blow. What is the Minister's estimate of future job losses, and what is his assessment of the effect of a reconstituted Royal Mail on the income of post office branches?
	Proposals for the serious reform of Royal Mail are welcome. Private capital to fund improvements in its services is welcome. We welcome, too, Mr. Hooper's focus on preserving the universal service obligation, and the proposed amalgamation of Postcomm and Ofcom into a sensible, tidied-up single structure. But after a decade of missed opportunities, the Government's last-ditch attempt to dangle the prospect of part-privatisation must not distract us from the real story: a bit of Enron accounting that will impose a huge bill on every family in the country for generations to come.
	The Government are taking the funds that would have paid most of the pensions, and placing a new obligation on future generations to pay the bills that those funds would have covered. Yet again, the Government are stealing everyone's tomorrow for their today. For future generations, the bill is in the post—and it has the Prime Minister's stamp all over it.

Patrick McFadden: As ever, the hyperbole of the hon. Member for Rutland and Melton (Alan Duncan) disguises the lack of any credible policy in his party.
	The hon. Gentleman implied that nothing had been done about Royal Mail for the last 10 years. I remind the House that, in 2007, the Government made available £850 million in reserves on the balance sheet to support the pension fund, that they made available loan finance to help Royal Mail to modernise, and that, back in 2001, they made available £500 million in loans to purchase the companies comprising GLS, which is Royal Mail's European logistics and parcels arm. Action has been taken and change has happened, but, as Hooper reports, that change has been too slow to meet the challenges confronted by the company in the face of changes in consumer habits and the burden presented by the pension fund deficit. I did not follow the hon. Gentleman's logic in that regard. The pension fund does have assets, but it also has liabilities. The problem is that the liabilities are greater than the assets, and that represents a significant burden for the company when it comes to meeting the costs.
	The hon. Gentleman asked about figures. As I said in my statement, last year the company had to find an extra £280 million—on top of the normal £500 million contribution to the pension fund—because of the pension fund deficit. To help the company to deal with the deficit, we released funds that could be spent on modernisation and meeting the challenges.
	We have received one approach from a potential partner, and we invite other approaches from interested potential partners. We will try to reach an agreement that is in the best interests of Royal Mail and the British public.
	The hon. Gentleman mentioned state aid. Of course we are aware that other companies in Europe have undergone similar transformations. We are certainly aware of the critical importance to post office branches of Royal Mail's business. Having made the announcement on the Post Office card account just a month ago, we are looking forward to a more secure and sustainable future for those branches. There is nothing in the statement that I have announced today that will pose a threat to that.

Dennis Skinner: Is the Minister aware that, in the real world, over the past nine months, the idea of privatisation and the halcyon days of 10 to 15 years ago have now disappeared? This Government have had to take steps to bail out some of the privatised companies so that they can carry on. The energy companies that were privatised are now ripping off the consumer, and the banking fraternity has had to be bailed out by the Government. Is it not strange to be talking about privatisation these days, when it has patently failed in so many areas? May I suggest that my right hon. Friend has a word with the Secretary of State and with this Mr. Hooper, whoever he is, and points out to them that things have changed in the past nine months? We are on a different set of rails now, and the sooner Mr. Hooper is told that—and that we should not invite in people like the Dutch TNT—the better this Labour Government will be.

Patrick McFadden: I have the greatest respect for my hon. Friend, and I can assure him that this company will remain publicly owned in line with the manifesto on which we fought and won the last general election. Bringing in a partner on a minority basis will give three advantages. It will give the advantage of the experience of having gone through change in a major postal company, which Royal Mail has not yet gone through; it will bring the confidence to carry through the decisions necessary for such change; and it will bring access to the capital needed to fund the modernisation. That is why it is an important part of the package that we have proposed today.

John Thurso: I thank the Minister for giving me an advance copy of the statement and notice of the salient points. It is clear from a rapid reading of Mr. Hooper's report that it is a serious body of work that sets out in clear terms the challenges facing Royal Mail, and that it offers significant and major proposals. Mr. Hooper and his team should be congratulated on their work; in broad terms, the report deserves a cautious welcome.
	For our constituents who value their postal service and their postmen and women, the key issue was always the maintenance of the universal service obligation, involving collection and delivery six days a week. I welcome the fact that it was clearly stated in the report and in the Minister's statement that the universal service obligation is to be maintained. However, as the statement makes clear, that objective requires a profitable Royal Mail, and that poses formidable challenges. I should like to ask the Minister some questions on these points.
	Dealing with the pension deficit will clearly be critical. That burden must be dealt with and, unlike the Conservative spokesman, I believe that that proposal should, in broad terms, be welcomed. However, it raises two clear questions. First, will the Minister tell us which of the assets are to be transferred? Will it be all of them, or will some be left with the Post Office? Secondly, can he confirm that Royal Mail will continue to operate a pension scheme in the way that it has in the past, and that it will continue to be funded out of profits, as it has been in the past?
	The report proposes a partnership, but leaves the detail to the Government. The statement, however, said that a private company would take a minority stake in the postal business. The former does not necessarily mean privatisation because it could be a joint venture into which both companies enter with no transfer of assets; the latter, however, requires a stake to be sold, which is part-privatisation, and requires a valuation. How will the Minister set about valuing that stake if that route is indeed chosen?
	There is much in the statement that will need very careful scrutiny—for example, the regulatory changes look sensible broadly, but the manner in which they are conducted will have considerable impact on the future of the Royal Mail. Another example is the arrangements for the Post Office—arrangements that closely mirror the policies set out by the Liberal Democrats three years ago when we began to look at this problem. On the arrangements for postal competitors, it seems to me—I hope the Minister will accept this—that there is a requirement for a level playing field, and that we should look again into how to achieve that and into whether competitors should be required to pay in any way.
	Those are details that must be gone into. The report is serious and needs to be taken seriously. As the Minister said and as the report makes clear, however, the status quo is no longer an option, as we recognised in our paper on the subject of three years ago. The devil will almost certainly be in the detail, as it is always so I end by asking the Minister for a clear commitment to a full debate on this subject at an early opportunity.

Patrick McFadden: I thank the hon. Gentleman for his broad welcome of our proposed changes. He mentioned the maintenance of the universal service obligation and it remains at the heart of the statement I made today and at the heart of our policy intention. We legislated to enshrine the USO in law and we are pleased to see that Hooper rejected the downgrading of the USO as an answer to the company's problems.
	I also welcome the hon. Gentleman's broad support for our pension changes. He is right, of course, that there is more detail to be worked through and more to be announced on this matter, but the principle is clear—that, as part of a wider package involving partnership and a change in regulation, we seek to lift the enormous burden that funding the current pension deficit poses to the company.
	On the issue of the partner, I say to the hon. Gentleman the same as I said to my hon. Friend the Member for Bolsover (Mr. Skinner)—that the company will remain publicly owned in line with our manifesto commitments. Our objective will be to get the best deal for the company and for the public in respect of those three key factors that a partner can bring: experience, confidence and capital.
	On the issue of competitors, Hooper considered and rejected the idea of a levy on them in order to fund the USO. He was also clear—this is important—that of the challenges facing the company, the shift from mail to other forms of technology is much more significant than other challenges and will have a much greater impact than in respect of other postal companies operating in the market.

Peter Hain: Will my right hon. Friend confirm that legislation is needed to allow a private competitor to come in and take a stake? Does that not open the door to full-scale privatisation, which is against the wishes of our party and our Government? Will he also confirm that taking the pension fund on to the Government's balance sheet effectively lifts a burden of perhaps £700 million off the Royal Mail's balance sheet, so it either fattens the calf for a future privatisation or leaves the Royal Mail without that liability in a much more effective position to compete as a fully owned public sector organisation? Is not the real villain of the piece, notwithstanding the threat of electronic communication, the problem of unfair competition rigged against the Royal Mail in favour of private competitors, which undermines the universal service obligation and the ability of the Royal Mail to deliver it? Is not that the real problem that needs to be reformed?

Patrick McFadden: My right hon. Friend is correct to say that legislation would be needed to take these changes forward, but he is not correct to say that that opens the door to privatisation of the company, because as I have said our manifesto commitment is clear and the company will remain publicly owned under the proposals I have outlined today.
	My right hon. Friend talks of pension changes. Hooper is quite clear that those could be justified only in the context of wider reform of the company and wider change in it. That is why this should be viewed as a coherent package, not as a menu of items to be picked one by one.
	I am afraid that I have to disagree with my right hon. Friend when he says that the main issue is other postal companies, not technology. Hooper concludes precisely the opposite and quantifies the effect of those two things on the company's balance sheet. He concludes that the impact of technological change is five times greater than that of any competition with other postal companies. I am afraid that the main challenge is not other postal companies; it is the change in lifestyle that the technological revolution has brought about.

Peter Luff: I am not sure how much I will help the Minister when I say that I think that the review team has done an excellent job and that the Government's indication that they intend to accept the broad thrust of the recommendations is a sensible decision indeed. Post Office Ltd and Royal Mail Group both face huge challenges and the report recognises the scale of those challenges, but huge numbers of questions on the details remain to be answered. For example, what will be the relationship between Post Office Ltd and Royal Mail Group in this new world, with a part-owned subsidiary run by a current competitor of Royal Mail Group? The regulatory changes needed to bring Postcomm into Ofcom are clearly important as far as Richard Hooper is concerned, but again legislation will be required. Over what time scale can we expect that legislation?

Patrick McFadden: The hon. Gentleman asks two questions. The first relates to Post Office Ltd. As I said, we are acutely aware of the importance of the relationship between Post Office Ltd and Royal Mail, and acutely aware that those arrangements enable the delivery of the universal service. It is our priority to keep the universal service, not to downgrade it. Therefore, we will be mindful of the importance of that to Post Office Ltd going forward.
	On regulation and other details, as I said, we will make a fuller statement in the new year, but Hooper's essential recommendation on this is clear: it is time for a change from the regulatory regime governed by Postcomm to a wider regulatory framework placing the Post Office in the context of the wider communications market and also ensuring that Ofcom's primary responsibility in this field will be the maintenance of the universal service.

Geraldine Smith: Does the Minister not recognise that most of the current financial difficulties facing Royal Mail stem from the postal regulator exposing it to unfair competition, allowing the vultures to pick clean the most profitable parts of the business? Does he not accept that the many years of contributions holidays taken by Royal Mail have played a major part in the build up of the pensions deficit that it now faces?

Patrick McFadden: I know that my hon. Friend is a passionate campaigner for post offices and Royal Mail, but I have to point her to Hooper's conclusion on the very point that she raises, which is that the principal challenge facing the company is not that from other postal companies, but the far greater challenge and the far greater impact on the company's balance sheet caused by the shift from mail to other forms of technology. Making the other postal companies go away is not an answer to the challenges facing Royal Mail.
	On the pension fund, regardless of what has happened in the past, we recognise that that is a major problem for the company. Therefore, as part of a package of wider changes, we are prepared to address the pension fund deficit.

Malcolm Bruce: While I welcome the Minister's assurance on the universal service, will he give a further assurance that it will mean what it says and will not lead to variations in charges on a regional basis or in delivery times? Many people living in rural parts of the country do not have access to competitors and depend on Royal Mail. They are already finding a diminution of service. Does a universal service mean what it says?

Patrick McFadden: Universal service means a one-price-goes-everywhere delivery, six days a week. That is enshrined in law, we are committed to it and it is at the heart of the reforms we have proposed today.

Michael Connarty: I look forward to reading the Hooper report, which should have come out last week, just before I visited my local delivery offices where people wanted to know about their future. This is a massive industry in which 30,000 to 40,000 people have already lost their jobs. I have some questions. What does it mean to say that the pension fund would be reduced substantially? If a burden is left that chokes up the new arrangement, the problem will not be solved. From my information as secretary of the Communication Workers Union in this House, I understand that TNT runs on a part-time basis. It brought in technology and paid off all its full-time workers, so that people get 22-hour contracts. Is that the future for post office workers?
	The Minister says that it is a package. It is a curate's egg, and the question is whether people will swallow it—

Mr. Speaker: Order. I understand the hon. Gentleman's deep concern, but Members have one supplementary question in these sessions because other hon. Members want to get in.

Patrick McFadden: As I have said to other right hon. and hon. Members in response to questions on the pension fund, our concern is to reduce the liability posed for the company, but only in the context of the wider change that Hooper set out in his report. The company that my hon. Friend mentions has made an approach to the Government. There may be other approaches in the coming weeks and months, but our intention will be to find a partner who can provide the three key qualities that Hooper mentioned in his report: the experience of having gone through major change in a postal network, the confidence to carry through such change and access to the capital necessary to finance it.

Ann Winterton: When exactly do the Government expect to introduce legislation on their proposals, and will it be within a Bill additional to the Bills recently announced in the Queen's Speech?

Patrick McFadden: Legislation to carry these proposals forward would be in an additional Bill. I cannot say exactly when it would be introduced, but we will be working out detailed proposals on these matters in the weeks and months ahead.

Don Touhig: I welcome the debate that will now ensue after my right hon. Friend's statement, and I say to him that without radical reform and a substantial change to senior management, Royal Mail does not have a future at all. Can he tell the House whether the Government will engage directly with those who work for the Royal Mail? I have no confidence whatsoever that the present management will discuss the matter with them.

Patrick McFadden: I am grateful to my right hon. Friend for acknowledging the urgency of change. He asks whether we will speak to the work force about the changes. Of course we will speak to them. As I said in my statement, it is time for a fresh start in industrial relations in the Royal Mail, and that fresh start is essential in the carrying forward of proper reform.

Lorely Burt: May I ask the Minister about access headroom? Many in the Royal Mail feel that that issue has constrained its competitiveness for a long time. Now that it is to be part-privatised, will the Government still be able to dictate matters such as access headroom to the Royal Mail?

Patrick McFadden: I repeat that the company will remain publicly owned in line with the Government's manifesto. The hon. Lady is right to say that access headroom has been controversial, and that people have raised a number of issues about it. It is a matter for the regulator, and in the context of the regulation change proposed by Hooper, it would be a matter for Ofcom in the future. It is important to remind the House that Hooper concludes firmly that the key challenge facing the company is not from other postal companies, but from other technologies. That is what lies behind a drop in the volume of mail of some 5 million items a day, and that drop is not just taking place in the UK, but in many other countries for precisely the same reason.

Lindsay Hoyle: I recognise that my right hon. Friend has made this statement, but I am not convinced by Hooper's recommendations. New technologies may have reduced letters by 5 million over two years, but the number of packages and parcels have substantially increased. Therefore, we ought to be getting into that business. Let me explain where we are really missing the point, however. It is not about selling off the silverware and looking for partners. We must charge private companies sufficiently high sums to ensure that Royal Mail makes a profit and is not subsidised by the taxpayer, because bulk mail is having a free ride at the expense of taxpayers. If we put that right, Royal Mail will begin to make a profit. Let us do it that way, not the privatisation way.

Patrick McFadden: My hon. Friend is correct to point to a growth in packet volumes as a result of people ordering over the internet, but that is not enough to counteract the falling volumes of mail. Overall, mail has fallen by 5 million items a day. My hon. Friend takes us back to the issue that the hon. Member for Solihull (Lorely Burt) and other Members raised by contending that the principal problem facing the company is competition from other postal companies and the terms by which that competition is conducted. Hooper concludes that that is not the case, and that the impact of that is just one fifth of the impact of the shift from mail to other technologies. Therefore, changing the regime for upstream access or headroom pricing will not deal with the Royal Mail's problems. That demands wider change and wider reform.

David Curry: I bet the Minister is looking forward to taking this through the House!
	On what date was the pension fund last valued, by how much has the stock exchange declined since, and will the Minister have another shot at defining "substantial", as used in the statement he has just given?

Patrick McFadden: The valuation takes place every three years. I think I am right in saying that the last valuation was in 2006, so we expect the next triennial valuation to take place early next year. We expect it to have grown substantially from the valuation in 2006 of a £3.4 billion deficit. That starkly shows the size of the burden imposed on the company, which is why, in the context of a package of wider reform, it makes absolute sense to relieve the company of that burden, so it can concentrate on the investment that is required to finance the transformation that the Royal Mail sorely needs.

Kate Hoey: How will the Minister—and, indeed, his Secretary of State—convince the public and many Members on the Labour Benches, and perhaps in all parts of the House, that this is not just the slippery slope to privatisation? We have seen this happen in the past: is it going to happen in the future? Will the Minister also tell us why on earth the Government feel they have to invite a foreign country's private postal operator to come in, when they could in fact fully support this highly valued public service?

Patrick McFadden: My hon. Friend asks how we can convince the public. The public want a strong USO, secure for the future. We do not have that at present, because the challenges I have outlined today—the transfer to different technologies, the pension deficit, the lack of efficiency in changing the company—mean the USO is now loss-making. We want to address that, put the company on a stronger footing, and make sure the USO is secure for the future.
	On the slippery slope issue, I again remind my hon. Friend of our manifesto commitment for a publicly owned Royal Mail. We will have a publicly owned Royal Mail, and any partnership would be only on a minority basis.

Michael Weir: The devil may very well be in the detail, but we are being offered very little detail today to find out where that devil lurks. The Hooper report states:
	"Experience from other countries suggests that the company could provide the universal service with around half its current mail centres."
	Does the Minister accept that, and what is his estimate of the number of job losses as a result of this announcement?

Patrick McFadden: The company is already going through a process of reducing the number of mail centres. Automation will mean fewer mail centres in future, as, I believe, both the company and the work force are aware. It is not for me to say exactly how many jobs would be involved, but automation will mean fewer mail centres. Many other western European postal organisations have gone through precisely that process.

John McDonnell: May I quote from the statement? It mentions, "Bringing in a partner through a minority stake in the Royal Mail's postal business". That will be interpreted by almost every postal worker as privatisation, no matter how the Minister dresses it up, and it conflicts with a commitment to a wholly publicly owned service that we gave that work force. What role will the Government play in offering the work force a sense of security in respect of the threat of job losses and the security of long-term employment, because those workers have served this country well over generations of commitment to this public service?

Patrick McFadden: I acknowledge the work force's contribution. This package offers them a more secure future for their pensions than would otherwise be the case. The Government established the Hooper review to examine how the Royal Mail can succeed in a world in which electronic and other forms of communication provide increasingly attractive alternatives to the mail and in which there is more competition in postal markets. That is precisely what Hooper has done in his report, which has been published today. Its recommendations are a consequence of our fulfilling a manifesto commitment to carry out this review.

Michael Jack: The importance of postal workers to the communities they serve cannot be underestimated, so under the new capital structure, which the Minister has outlined to the House today, will postal workers be able to acquire an equity stake in the new business? Do his proposals for the pension fund restructuring breach the state aid rules?

Patrick McFadden: The intention in the Hooper report is for Royal Mail to partner another postal firm that has experience of going through this kind of change. It is not a share floatation that might be talked about in another context; this is a partnership with another postal firm. Of course, we will be mindful of the state aid rules in any reform package that we take forward.

Gordon Prentice: We are not going to sub-contract our judgment to Richard Hooper, who is a former vice-chair of Ofcom. We want a wholly publicly owned Royal Mail, and I will not support any legislation that privatises it. Is it not the case that over a very long period Government policies have been designed to weaken the Royal Mail in order to encourage competition into the market? Is it not scandalous that new entrants have been allowed to undercut the Royal Mail? There has never been a level playing field in the provision of postal services, and it is completely disingenuous for the Minister to advance this argument—

Mr. Speaker: Order. Other hon. Members want to get in.

Patrick McFadden: I cannot accept that the Government have weakened the Royal Mail. We have lent the company money to make new acquisitions, and put up money to support the pension fund and to finance modernisation. But that process has not proceeded quickly enough in the face of the challenges that the company is facing. Today's report concludes that new entrants are not the primary problem for the Royal Mail—new technology is.

Edward Leigh: One of my many failures in this place occurred 15 years ago, when, as Post Office Minister, I tried to privatise the Post Office. In the light of the Government's acceptance of the importance of private capital, may I welcome new Labour to the Thatcherite wing of the Conservative party?

Patrick McFadden: As I have made clear a number of times, we will maintain the Royal Mail as a publicly owned company, in line with our manifesto commitment to have a publicly owned Royal Mail.

Phyllis Starkey: The fact that the Hooper report has now been published is welcome, as it allows decisions to be taken and discussed in the context of the whole picture instead of the piecemeal way in which they have been announced thus far. The mail processing centre in my constituency is one of those under threat. Would the Minister agree to meet a delegation from that mail processing centre so that he can understand the context of the decisions that are being made for my constituents, including both those served by and those working in the centre?

Patrick McFadden: I am always happy to meet hon. Members and any delegations they wish to bring, but Hooper is clear in his report that what the company needs is less political interference in its day-to-day decision making, not more. The future of mail centres must be for the company and the union to negotiate: it is not for Ministers to dictate operational matters such as where mail centres should be situated.

Alan Reid: I welcome the commitment to the universal service obligation, but if Royal Mail is to be in a position to continue to deliver it, it must be adequately funded and have fair competition. Will the Minister consider a levy on companies that are not implementing the universal service obligation and are using the money to pay Royal Mail to do so? At present, too many private companies are cherry-picking the easy side of the business.

Patrick McFadden: Hooper considered and rejected the idea of a levy, because the real challenge is to make the changes necessary in Royal Mail to enable it to deliver the USO while not running at a loss, as it is at the moment. That requires changes in automation, the changes that have been mentioned to the pension fund, and other regulatory changes that we have outlined today.

Katy Clark: The Minister will be aware of the existing very low morale in Royal Mail, partly because the work force has to deliver for private sector competitors at a loss. He will also be aware of press reports today that up to 50,000 job losses could result from the proposals. Will he tell the House what implications the proposals have for jobs? Surely he must agree that the proposals go against the spirit of the manifesto commitment given by the Labour party?

Patrick McFadden: I do not accept that the proposals are not consistent with our manifesto, as I have said several times, because the company will remain publicly owned. My hon. Friend talks of low morale, and it is true that there has been a history of industrial relations problems in Royal Mail. Ascribing blame serves no good purpose, and a fresh start in industrial relations is needed if change is to proceed at the pace and in the spirit necessary to get the company into the shape necessary for the future. We need a fresh start in industrial relations, and there is a lot in these proposals for the work force, not least security for the pension fund as part of a wider programme of change.

Andrew MacKay: I congratulate the Minister on his courageous decision to part-privatise Royal Mail and assure him that when he introduces the legislation we will vote for it, so that—despite the clear number of Labour rebels that there will be—he will get it through.

Patrick McFadden: I believe that the legislation to implement these proposals is in line with our manifesto and offers a good future for Royal Mail, its work force and the public.

Frank Field: May I offer the Minister an opportunity to deny specifically the allegation that the Opposition spokesman yelled from a sedentary position—that the Government are intent on stealing the assets of the pension fund? Will he confirm that what we will be discussing is the pension fund and its assets remaining in existence, and the terms on which taxpayers may contribute further to overcoming the deficit?

Patrick McFadden: As I say, the hon. Member for Rutland and Melton (Alan Duncan) has a weird concept of stealing if he thinks that our proposals amount to stealing. The proposals take into account the fact that there are assets and liabilities in the pension fund. The problem for the company is that the liabilities are far greater than the assets. The Government will therefore try to address that problem to relieve the company of the burden of the additional payment that that deficit poses for it at the moment.

Bob Spink: Let us be clear: decent, hard-working Royal Mail staff and their families are approaching this Christmas deeply worried. Can the Minister guarantee that there will be no forced redundancies as a result of his statement, and will he make it his policy to start to return public business to the Post Office?

Patrick McFadden: As I said in my statement, the Hooper review did not cover the network of post office branches. Our intent was illustrated several weeks ago when we announced that the Post Office card account would go to the post office network. I am glad to say that the Select Committee on Business and Enterprise has agreed to undertake a further inquiry into what further work might go to the post office network. I know that that is valued on both sides of the House.
	On the question of the staff, I return to what I said to my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) when she said that morale was low. I accept that there has been a history of industrial relations problems in the Royal Mail. I believe that there is a need for a fresh start, and I do not believe that much can be gained by blaming anyone for the history of industrial relations problems. There is a lot in the statement for the staff at Royal Mail, who have worked hard and made a hugely important contribution. There is a lot in this for the staff, particularly when it comes to the pension fund proposals.

Russell Brown: I thank my right hon. Friend for the commitment that he has given to the universal service obligation, which means so much to a rural constituency such as mine. I and a number of Labour colleagues met the regulator before he took up post and officially started to liberalise the service. We warned the then Secretary of State and Ministers with the relevant responsibilities that we were about to see a butchering of the service. What happened in such a short space of time should never have happened to the extent to which it did. It is not beyond the wit of the work force or the Royal Mail management team to deliver for this country what we require without the interference—I shall put it no more strongly at this point—of a third party to partner the business.

Patrick McFadden: Hooper is clear that his recommendations are a package and that they stand or fall together. That is the view that the Government take. My hon. Friend mentioned the regulator and, as I have said, under the proposals the regulator will change from Postcomm to Ofcom. However, on the effect of the liberalised market on Royal Mail, I repeat that Hooper makes it very clear that the main impact on the company's balance sheet comes not from other postal companies or the terms of that competition but from the shift from mail to other technologies. That is having by far the most major impact on the company's balance sheet.

Alistair Carmichael: Many of us predicted the impact of what Hooper refers to as "asymmetric competition" at the time of liberalisation. I observe that paragraph 193 of the report states:
	"Competition reduces Royal Mail's revenue available to support the universal service. And some forms of competition may be inefficient if they simply exploit the constraint placed on Royal Mail to provide the universal service."
	Notwithstanding what he told my hon. Friend the Member for Argyll and Bute (Mr. Reid), will the Minister keep the door open on the possibility of a compensation fund at some future point? My constituents can tell him from their experience of the parcel post market that if liberalisation takes place without proper protection, a universal service might exist but it will exist in name only.

Patrick McFadden: We are determined to ensure that the universal service does not exist in name only. We understand its value socially and in terms of the one price goes anywhere service, which I suspect is valued in the hon. Gentleman's constituency. Let us be clear about Hooper and competition. He says that competition has had benefits. He does not accept the analysis that the Royal Mail's problems were caused by opening the market to liberalisation. Instead, he paints a picture of much more deep-seated problems of a failure to modernise, a growing pension fund deficit and a transfer in consumer habits from mail to other technologies. That is why he proposes a far-reaching package of extensive reform.

Family Justice

Jack Straw: With permission, Mr. Speaker, I shall make a statement about the opening up of the family courts. I have today laid before Parliament the document "Family Justice in View", copies of which will be available in the Vote Office and on my Department's website.
	Family courts play a crucial role in our society. They make far-reaching decisions—for example about how to divide finance on divorce, or what protection to give victims of domestic violence—and they make life-changing decisions about the future of children: whether they should be given contact with their parents, whether they should be removed into the care of the state, and whether they should be placed for adoption. The decisions of family courts have profound and long-term effects on the lives of those involved and cumulatively on society as a whole.
	Family cases can be conducted in the magistrates family proceedings courts, in county courts, and in the family division of the High Court. All those with responsibility for these proceedings are well trained and work to extremely high standards. It is vital that these courts, like any others, command the confidence of the public, if the public—including the parties involved—are to accept their decisions. That can best be achieved if justice in these courts is seen to be done.
	For entirely legitimate reasons, the privacy of parties to family proceedings must be properly protected. That is of enormous importance to adults, and is an overwhelming imperative in cases involving children. At present, with some exceptions, neither the public nor the media are permitted to witness proceedings in these courts. However, many argue that the current provisions to safeguard privacy and confidentiality go too far, leaving family courts unfairly open to accusations of bias or even injustice.
	In contrast, there is a greater degree of openness in the youth courts. For example, the media are allowed to witness and report proceedings in the youth courts, so long as they do not identify juvenile defendants, and youth courts have a wide discretion to allow others to attend. These rules have worked effectively, and both their spirit and their letter have been well respected by the media.
	The debate about opening up the family courts has intensified in recent years, and two successive consultations have been carried out, in 2006 and again in 2007. The results of those exercises were inconclusive, with strong representations on the one hand in favour of improving transparency, and on the other in favour of maintaining the current position.
	In the past few months, the Under-Secretary of State for Justice, my hon. Friend the hon. Member for Lewisham, East (Bridget Prentice), who has responsibility for access to justice, and I have been actively considering how we can shed more light on family courts while preserving the imperative of the welfare of the child. The Government have now reached their conclusion, and I am therefore announcing today that the rules of court will be changed to allow the media to attend family proceedings in all tiers of court.
	Understandably, the media will be subject to reporting restrictions similar to those that apply in the youth courts. The courts will be able to relax or increase those restrictions in appropriate cases, and will have the power to exclude the media from specific proceedings altogether where the welfare of the child or the safety of the parties or witnesses requires it. The overall effect of these changes will be fundamentally to increase the openness of family courts, while protecting the privacy of children and vulnerable adults.
	As well as allowing the media to attend family proceedings, there is a need to increase the amount and quality of information coming from the courts. At present, anonymised judgments of the Court of Appeal, and in some instances of the High Court, are made public, but that is not the situation for the county courts or the family proceedings courts, which deal with the bulk of family law cases.
	We have therefore decided to pilot the provision of written judgments when a final order is made in certain family cases. The courts in the pilot areas—Leeds, Wolverhampton and Cardiff—will, for the first time, routinely produce a written record of the decision for the parties involved. In selected cases, where the court is making life-changing decisions for a child, it will publish an anonymised judgment online, so that it can be read by the wider public.
	The consequences of family proceedings are so significant that the parties involved will sometimes need to seek advice or support from a range of people, including legal advisers, family members, medical practitioners and Members of Parliament or other elected representatives. To do so, they must be able to discuss and share information about their case. In 2005, we made changes to the rules of court to allow people to disclose certain information to specified individuals, but after two years it became clear that those rules remained unnecessarily restrictive and too complicated. Following a consultation last year, the Government have now decided to relax the rules on the disclosure of information in family proceedings.
	Parties and legal representatives will be able to disclose more information for the purpose of advice and support, mediation, the investigation of a complaint, or—in an anonymised form—for training and research. In more cases, the person receiving the information will be able to disclose it to others, for the purposes for which it was originally disclosed to them, without seeking the permission of the court. To protect the anonymity of children after proceedings have concluded, the decision of the Court of Appeal in Clayton  v. Clayton will be reversed. In principle, that decision removed the protection of the court once proceedings had been completed, although that protection could be reapplied in particular cases.
	Most of the key changes that I have announced today can be made in the rules of court, without the need for primary legislation, but some will require legislation, including the reversal of the effect of the decision in Clayton  v . Clayton and the potential opening-up of adoption proceedings. As regards the latter, we will consult on the most appropriate approach.
	The Government are committed to improving the visibility of justice in this country—to lifting the veil that sometimes keeps justice from view. The measures that I have outlined today will help to build a transparent, accountable family justice system that inspires the confidence of the people whom it serves, while continuing to protect the privacy of the parties and children involved. I commend the statement to the House.

Nick Herbert: I thank the Justice Secretary for early sight of his statement. The UN convention on the rights of the child states that
	"In all actions concerning children...the best interests of the child shall be a primary consideration."
	Some argue that privacy in family courts is essential to that end, but does the Justice Secretary agree with me that the privacy of the child and the interests of the child are not necessarily always the same thing? Secrecy can also mean a lack of accountability, which in turn leads to poor decision making. Does not the terrible case of baby P remind us that where the welfare of children is concerned, poor decisions can have catastrophic effects?
	The Constitutional Affairs Committee concluded in 2005:
	"A greater degree of transparency is required in the family courts."
	Speaking for the Conservatives in 2006, my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) said that
	"we need to open up the closed doors a bit more."—[ Official Report, Westminster Hall, 12 January 2006; Vol. 441, c. 164WH.]
	Would the Justice Secretary concede, in the spirit of transparency, that the Government have been rather less sure about whether to open the door? In 2006, the previous Lord Chancellor, Lord Falconer, made firm proposals to allow the press in. By 2007 he had changed his mind, arguing that "the welfare of children" was "at stake." Now the Government have changed their mind again. Within three years, the Department has changed its identity once, and its proposals twice. The Justice Secretary says that he has now reached a conclusion, but he also says that he is presenting proposals. Are they final?
	We all recognise that this is a difficult issue, but is not the problem with secrecy that it ignores the issue of public confidence in the court process? The president of the family division, Sir Mark Potter, has spoken of
	"an age of transparency...amidst largely misplaced criticisms of 'secret justice'".
	Does not the experience of countries such as New Zealand and, closer to home, Scotland, demonstrate that properly regulated transparency is perfectly workable?
	May I press the Justice Secretary on adoption proceedings, about which he is consulting further? Does he agree that, while there should be a presumption against openness in the final hearings, in which delicate and sensitive decisions are made, it is important to have scrutiny in the opening stages, in which the work of social workers, the Children and Family Court Advisory and Support Service and the National Youth Advocacy Service needs to be monitored?
	Does the Justice Secretary recognise the increased stress on children that may result from the presence of the media in court, and the fact that many professionals such as the National Society for the Prevention of Cruelty to Children have serious concerns about that? Is he confident that the press will be as compliant with reporting restrictions as they are, for example, in New Zealand? Will all journalists be allowed into court, or only those who are accredited? Crucially, what sanctions for breaching reporting restrictions does he envisage? The Government previously proposed new legislation to ensure strong sanctions to protect anonymity. Does that proposal stand, and will third parties with a legitimate interest be permitted to attend, as they are in other countries?
	A key concern for families is that they are unable to raise their cases with the media, but it appears that the Government's proposed rules for disclosure will still prevent them from doing so. Will the Justice Secretary confirm that, and explain why he believes it is right to maintain that restriction? When the Government last proposed transparency in 2006, they recognised, in the regulatory impact assessment, that both they and the courts would face increased costs, including for additional security. Have the Government estimated these costs? At a time when the courts' budget is being cut, how will those costs be absorbed? Is not the fact that the Government are piloting the provision of written judgments in only three courts evidence of concern that the resource implications could be considerable?
	There are important questions about how transparency in family courts will operate, but does the Justice Secretary agree with me that child protection can no longer be a secret business? It is time to shine a bright light of public scrutiny to ensure that the most vulnerable in our society are protected. With proper safeguards, transparency is a force for good.

Jack Straw: I thank the hon. Gentleman for his support for the proposals. He teased me about the fact that the Government had one view, then a slightly different view, and now they have a—

Nick Herbert: Third way!

Jack Straw: No, the original view—this is a binary choice.
	The reservations that the hon. Gentleman went on to express, including about the sensitivity of adoption proceedings, and the concerns raised by some children's representatives about having the media in court, show that this is a finely balanced judgment, but ultimately we have to say yes or no. He asked whether these were firm or final proposals, and answer is yes, they are. I hope to introduce measures that require rule changes, pressing on with this, in the spring, possibly in April. The changes in adoption require primary legislation—the Adoption and Children Act 2002 imposes a statutory bar on the attendance of the media or the public, and there is no current legislation available to make those changes—so we will have time to consult in more detail on that.
	The hon. Gentleman asked me some specific questions about disclosure by families to the media. We have to put the detail of the changes to the rules committee, and I am actively considering that issue. The key issue, in my experience as a constituency Member of Parliament, is the assurance that if information is disclosed further, the identity and privacy of the child and, by extension, the family, is still protected. However, I thoroughly agree with his view, which is ours, too, that the quality of family justice is not served by proceedings that, to all intents and purposes, are secret and removed from the view of the media. I take his point that there is a clear distinction between a child's best interests and the privacy, not of the child—no one is arguing about that—but of proceedings.
	We have not estimated the cost of implementing the changes because we believe the costs will be marginal. For example, in respect of youth courts, which have to operate exactly the same restrictions but with the courts in many cases allowing individual members of the public and others in, I have never had any representations that that is a costly process.
	Once there is a legislative opportunity, we will seek to rationalise the penalties and the regime. Meanwhile, a breach will be contempt of court, for which, in principle, imprisonment is the penalty. In respect of other proceedings in the youth courts and in Crown courts where juveniles and young people are being tried, and in respect of other reporting restrictions, the experience is that overwhelmingly the press respect restrictions.

David Howarth: I, too, broadly welcome the Secretary of State's statement as a move in the right direction. There is a basic principle, as I hope he will agree, that justice should be seen to be done. Secret justice is often injustice. Privately heard witnesses who think they are less likely to be found out are more likely to be self-serving than witnesses in public, judges are more likely to go along with the cosy consensus that often develops between experts when there is no prospect of public comment on their judgments, and public authorities are more likely to act on insufficient evidence when their decisions are not subject to public scrutiny.
	It is right that that principle should apply even in difficult cases, such as those in family proceedings. It is understandable that there will be some resistance from some professional groups, and clearly there is a balance to be struck between the public interest and the interests of individuals, especially of children, but as the hon. Member for Arundel and South Downs (Nick Herbert) said, I hope the Secretary of State agrees with Sir Mark Potter when he said in October that more openness would help to dispel myths about bias and inaccuracy in the family court, especially if there are enforceable rules about anonymity.
	The Secretary of State spoke only about the media. He did not speak about access to the courts for the public. Obviously, different considerations apply, but what conclusions have the Government reached on admitting the public to some family proceedings?
	On the publication of judgments, I am a little disappointed that the right hon. Gentleman has not gone further than a pilot. Publication of judgments, suitably anonymised, obviously, is vital to the scrutiny of what judges do. Their judgments must be open to comment and criticism; otherwise the law itself cannot develop. There have been cases where even professional law reporters were excluded from the courts. Surely the Secretary of State agrees that that should not happen.
	I welcome what the right hon. Gentleman said about the disclosure of information by parents, but may we be clear about what that means? Will parents be able to discuss their case with their MP, which was one of the examples that he gave? What will be the position on the important issue of expert witnesses and second opinions? Will parents be able freely to approach experts who might help to challenge the views of the local authority expert in their case?
	Will the Secretary of State be specific about what part of Clayton  v. Clayton he proposes to overrule? There are two parts to that judgment. Is he saying that Parliament should overrule the part about the film that the father was going to make when the child had been abducted? Overruling that would make the situation worse for the child's privacy, not better.
	Finally, it is disappointing that the right hon. Gentleman has not taken the opportunity to make a wider announcement about family courts, especially about the increase in family court fees in public law cases from £150 to £5,000. Will he tell the House what effect on the volume of cases that change has had? What are his criteria for the success or failure of that policy? Is it just raising more money, or does he want there to be fewer cases?

Jack Straw: I am grateful to the hon. Gentleman for his support for the proposals. He asked me a number of specific questions. Are we proposing that members of the general public be allowed into the courts? No—and to that extent, this regime is more restrictive than the one that applies in the youth courts. However, I think that that is appropriate, although we are open to representations, if necessary, on the issue. Will parents be able to discuss their cases with MPs? Yes, and in my experience they do already, although often in breach of some extraordinarily complicated and convoluted rules, which I discovered only very recently.
	One of the issues is about the identity of expert witnesses being able to be made public. My default setting is that they should; I believe that in cases of this kind, the expertise of such witnesses should no more be allowed to go without scrutiny than the expertise of those in other cases, in which equally life-threatening or life-changing decisions are made and expert witnesses have to justify publicly their expertise and judgments.
	We are seeking to overturn the part of Clayton  v. Clayton that says that in principle the protection of the privacy of the child should fall away once the proceedings have finally been completed. We intend to reverse that, so that the presumption is the other way.
	There was a huge consultation on the increase in family court fees. Local authorities had a transfer of £40 million from the Ministry of Justice budget—and a little more, I may say—to meet the full costs of that transfer of fees. I would have preferred the transfer to have been ring-fenced to the local authorities so that they could use it only for these purposes. The local authorities are themselves root and branch opposed to ring-fencing—but they have had the money. It therefore does not lie in their mouth to complain that they cannot afford the fees: they can.
	Moreover, the fee is £4,000 on average; it ranges from £1,750 to £4,825, and the full fee applies only at the upper end. Local authorities have to base their decisions on the interests of the child. The fee, even at £4,000, is a very small proportion of the total costs of taking a case, which average £25,000. It is a still smaller proportion of the costs of taking a child into care, which are £40,000 on average and rise to £101,000 and more if the child is taken into secure accommodation for a year.

Several hon. Members: rose —

Mr. Deputy Speaker: Order. I would appreciate some help. I realise that this subject does not necessarily lend itself to brevity, but I hope that hon. Members will try.

John Battle: I welcome the statement, particularly the reference to the family courts in Leeds. A recent survey of children under 14 revealed, perhaps surprisingly, that their highest wish was an absolute ban on divorce. In view of that, may I ask my right hon. Friend to underline the fact that the purpose of family courts is to disentangle broken relationships, enable people to rebuild their lives positively and ensure the future flourishing of the children—not to expose individuals to damaging media destruction in the future?

Jack Straw: Of course, I entirely support my right hon. Friend. Any of us here—and I include myself—who as a child saw the break-up of their parents' relationship knows that what my right hon. Friend says is absolutely true.

Douglas Hogg: Obviously, the devil lies in the detail and I very much hope that we will be allowed to debate the draft rules. Subject to that, I approve of what the right hon. Gentleman has said to the House. Transparency is good news as far as the quality of justice is concerned: it puts judges on their toes, which is jolly good news, and it puts expert witnesses on their toes, which is also good news. Furthermore, it enables us to know rather more about the welfare reports—and that, too, is good news. I hope that the right hon. Gentleman will be as ambitious as possible about transparency and let as many people as possible into the courts, subject to the protection of proper confidentiality.

Jack Straw: I thank the right hon. and learned Gentleman; it is unusually good news that he is giving support to something that I have done. I welcome that in the spirit of Christmas and will consult the Whips about debating the rules.

David Taylor: I declare an interest as a member of the Magistrates Association. The statement referred to all those with responsibility for these proceedings being well trained and working to extremely high standards. That is especially true and important in relation to the staff. Will the Secretary of State say a word or two about the need for staff security and the confidentiality of staff names? We saw a recent example where Fathers 4 Justice attacked staff at NAPO offices last week. They deserve better than that. The later part of the statement referred to courts having the ability to relax or increase reporting restrictions in appropriate cases. Will guidelines for those appropriate cases emerge from the pilot, and how will they be disseminated nationally?

Jack Straw: The pilots will produce guidelines on the publication of anonymised judgments. Those guidelines will not relate to the use of discretion to exclude the media—that will emerge principally through the practice of the family division. We are all concerned about the security of staff, but many people who make important decisions have no option but to have their identity made public. We cannot allow a situation to obtain whereby public officials who are paid by the taxpayer are able to make their decisions anonymously because of fears for their security. In practice, the number of cases where the security of staff is threatened is tiny.

Roger Gale: The Justice Secretary has to understand that the increase in charges from hundreds to thousands of pounds has had the real effect of reducing the number of cases referred by social services to the family courts. The policy that he has announced this afternoon will simply not work if the cases are not taken to court in the first place. He must address the funding issue, which has led to a situation in which about a third of the casework is being funded that needs to be funded.

Jack Straw: I do not accept what the hon. Gentleman says. The money—£40 million and more—is there and is being paid to the local authorities. Let me make it clear that it was local authorities who did not wish it to be ring-fenced. The number of cases started to fall before these changes were introduced, and because of major procedural changes—the introduction of the public law outline—they are now rising.

David Kidney: I welcome openness, but will my right hon. Friend confirm whether I am right in remembering that during the second consultation, what most caused Ministers to hesitate in making the decision announced today was that the great majority of children who responded to the consultation were opposed to letting the media into family courts? Is he saying that he must regretfully disregard their representations, or that the design of the scheme takes into account those representations?

Jack Straw: Of course, I do not dismiss children's concerns, but ultimately we have to make a choice. I believe—and experience has shown this—that the media will act responsibility. As the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) said from a sedentary position, in practice, there has not been a problem with the observance of reporting restrictions in the youth courts or elsewhere. Whatever else people may say about the British media, they are respectful of these restrictions, and the penalties on editors and journalists if they break the restrictions are very severe.

Richard Ottaway: I go slightly against the flow in saying that I am yet to be convinced by these proposals, and I will watch the pilot schemes with interest. The Secretary of State drew on the experience of the youth court when he stated that these rules have worked effectively and their spirit has been well respected by the media. I must confess—I have written to him about this—that that has not necessarily been my experience, particularly as far as witnesses are concerned. Will he say what the situation will be with witnesses in the county court and the family court? Will the press be allowed to report their names?

Jack Straw: No, the press would not be allowed to report witnesses' names, because they are parties to the proceedings. The situation is different for expert witnesses, but with that exception, the identity of witnesses will be protected. I have yet to see the letter from the hon. Gentleman, but although there may be rare cases where there is concern about the operation of the family courts, such occasions are few and far between.

Jim Dobbin: I welcome the Secretary of State's statement. I have experience; a family came to see me who were concerned about the local authority's involvement in their ongoing case. The case ended up in the family courts and the judge made a ruling that the family should not approach me again while it was in court. In my view, that was not really about protecting the child, which must be of the utmost importance, but about protecting the professionals involved in the case, because I was dubious about their judgment.

Jack Straw: I accept what my hon. Friend says. We are changing the position so that in future a judge cannot make such a ruling in any case in which a party wishes to approach their Member of Parliament.

Tim Loughton: I welcome the proposals that the Justice Secretary has announced, although a lot of the details are still to be worked out and I could not quite understand why the previous good work had come to a grinding halt.
	One of the biggest criticisms of the workings of the family courts has been the lack of accountability of social workers, Children and Family Court Advisory and Support Service workers and expert witnesses, particularly when errors are made that become part of the court record—a problem that is often compounded by the high turnover in those staff. As part of the review, will the Justice Secretary ensure that such errors are not given protection and that reporting will be possible in order to highlight those errors, to ensure that they are not made and to increase the accountability of those with key roles to play in the judgments that can be made?

Jack Straw: The judgments in such cases are very difficult. Errors may sometimes be made, but I share the view, expressed not least by the hon. Member for Arundel and South Downs (Nick Herbert), that the greater the system's openness, including through the scrutiny of public officials, the smaller the likelihood not only that egregious errors will be made, but that they will go unnoticed.

Rob Marris: I welcome greater transparency. Wolverhampton, which I represent, will be a pilot area, in which full written judgments will routinely be made. It seems to me that that will have resource implications, because it will take up judicial time, as well as a certain amount of staff time. Will my right hon. Friend assure me that there will be extra resources for pilot areas, to ensure a full validation and to ensure that other cases are not adversely affected by resources being sucked into the pilot cases?

Jack Straw: We are making appropriate arrangements in the pilot areas.

Elfyn Llwyd: The notion of written judgments is an excellent idea, given adequate resources, of course. As a practitioner—I declare an interest as a member of the family Bar and I still occasionally practise—I am fearful that bringing in the media when parties to the action are giving evidence will undermine the quality of that evidence, given that it is often highly sensitive and intimate evidence. I am concerned that the proposal will suppress the truth, which is the last thing that anybody wants.

Jack Straw: I understand the hon. Gentleman's concern. There is a balance to be struck. My view, based not least on the experience of the youth courts, is that having the media there will produce a better overall quality of justice and, above all, a better perception of the justice that such courts provide.

Madeleine Moon: Protecting the identity of the child and giving them the privacy that they rightly deserve in cases where it is often the failure of adults that has brought them before the courts is paramount. Will my right hon. Friend be holding meetings with the Press Complaints Commission and the Society of Editors to ensure that there are clear guidelines, particularly for local newspapers, whose reporting is more vulnerable to identifying who the child is and what the family circumstances are?

Jack Straw: Yes.

Angela Watkinson: The statement has rightly focused on the protection and welfare of children, but the family courts also deal with divorce cases, not all of which involve children. Will cases that do not involve children be subject to the same media scrutiny when they concern what are in effect private matters between the parties?

Jack Straw: Yes, they will.

John Hemming: I must declare an interest as co-ordinator of the Justice for Families campaign.
	One of the critical things that we need to do in this country is improve decision making in respect of children in public law proceedings, especially in view of the number of serious case reviews. Scrutiny in the family courts is key to that, so I welcome much of the statement. I do not think that, in reversing the judgment in Clayton  v. Clayton, the Government intend to cause a 17-year-old child to be unable to complain about his or her treatment, but I ask the Secretary of State to answer the question from my hon. Friend the Member for Cambridge (David Howarth) about second opinions. Will it now be possible for a party to obtain a second opinion without the permission of the judge?

Jack Straw: I shall have to return to the hon. Gentleman, and to the hon. Member for Cambridge (David Howarth), on that discrete issue.

Mark Pritchard: I welcome some of what the Secretary of State has laid before the House, particularly his comment about lifting the veil. Given that the Government are conceding more divorce and matrimonial matters to sharia councils, may I ask what provisions have been made and what consultations have taken place with the Islamic community, and whether there is any overlap between what he has said today and statements from that community?

Jack Straw: I have had absolutely no discussions with representatives of Muslim communities about the proposals. Members of the Muslim faith are subject to the law of the land like any other groups, and they are the first to accept that. In so far as the decisions of so-called sharia councils are accepted and enforced in the English courts, that is done according to provisions of the Arbitration Act 1996, which was passed by the previous Administration.

John Baron: I welcome the statement, but may I suggest to the Secretary of State that owing to the current level of secrecy, over-zealous social services departments are often not held to account and children are often taken away from their parents for spurious reasons? I have a constituent whose two boys, aged 14 and 16, were taken into care simply because they would not speak to their mother after an acrimonious break-up and wished to be with their father. Will the Secretary of State meet me to discuss the case, if only so that he can see for himself how bad the system can be when cases such as this operate under a veil of secrecy?

Jack Straw: Of course I should be happy to see the hon. Gentleman, but he should bear in mind that social workers and the courts as a whole are between a rock and a hard place. The burden of the criticism in the baby P case is not that the child was taken into care too soon, but that the child was not taken into care at all. There is a really difficult set of judgments that everyone has to make.

Edward Timpson: I, too, declare an interest as a member of the family Bar, although I do not currently practise.
	May I press the Secretary of State on the issue of judgment pilots, and on two issues in particular? According to his statement, certain family cases will be piloted as part of the scheme. Has he narrowed that down, and does he know what cases those will be? It also appears from the statement that the written judgment will be a necessary element of all the pilot cases. If that proves successful in the pilots, will it be introduced on a wider basis, or will it be at the judge's discretion to decide whether a judgment should be made public?

Jack Straw: Let me make it clear that the pilots relate to the publication of anonymised judgments. The major changes relating to the admission of the media will not be piloted; they will be introduced on a universal basis in the England and Wales jurisdiction once the rules have been agreed. We fully intend the scheme to be rolled out across the country if the pilots are successful.

Sutherland Inquiry

Edward Balls: The delivery of this summer's national curriculum tests for 11 and 14-year-olds was a shambles. I want to say to all the teachers, pupils, parents and markers who have been affected how sorry I am for all their inconvenience, stress and frustration. What happened this year was completely unacceptable. It was because I was determined to get to the bottom of exactly what went wrong and to ensure that it does not happen again that, in July, I asked Lord Sutherland to conduct an independent inquiry. I laid a copy of Lord Sutherland's final report before the House at 2.30 this afternoon, and I have already acted to ensure that all his recommendations will be implemented in full.
	In this statement, I will set out the Government's initial response, and the steps that we are taking to ensure that the 2009 test results will be successfully delivered on time. I am grateful to Lord Sutherland for his very thorough report, and in January I will publish a detailed response setting out how we are implementing all his recommendations in full.
	Lord Sutherland begins his report with these words:
	"At its heart, this summer's test delivery failure represented a failure in customer service—to...pupils, to their schools, and to the markers upon whom the National Curriculum testing regime relies."
	He finds that
	"failures occurred at almost every stage of the test delivery process".
	He also says:
	"The primary responsibility must therefore rest with the American"
	not-for-profit
	"organisation, ETS Global BV...which won the public contract to deliver the tests and failed its customers."
	In particular, Lord Sutherland finds that
	"ETS's project management was not fit-for-purpose...ETS failed to identify and assess risks accurately and failed to report risks to NAA transparently...There were cumulative failures in different components and interfaces of the ETS delivery system...ETS did not invest in its relationship with schools and markers, and its level of customer service was wholly unacceptable and lacked professionalism".
	That is why, on 15 August, the Qualifications and Curriculum Authority dissolved ETS's contract. ETS forfeited a significant amount of future earnings and repaid £24.1 million to the taxpayer, which is two thirds of the money due to ETS for the first year of its then five-year contract.
	Lord Sutherland then says:
	"The events of this summer also represent a failure on the part of one of the Government's Non-Departmental Public Bodies, the QCA...to deliver its remit."
	His report
	"describes the procurement process that QCA used to select its delivery supplier, ETS, how it managed the contract, and why it should have realised sooner that the test results could well be seriously delayed."
	In particular, he finds:
	"QCA had project and risk management systems in place, but did not use these effectively to support and challenge ETS and inform decision-making".
	He finds that
	"The QCA Board had insufficient oversight of the management and risks associated with the delivery of its biggest contract".
	He finds that
	"neither NAA senior personnel, the QCA Executive, or QCA Board appear to have assessed the mounting risks appropriately",
	and that
	"the issues that arose during the test process should have alerted ETS, and in turn QCA, to the severity of the situation and the inevitability that test results would not be delivered on time."
	I have today written to the new chair of the QCA board, Mr. Christopher Trinick, asking him to implement in full all Lord Sutherland's recommendations relating to the QCA, and to provide me with a full report on progress by 16 January. In a statement this afternoon, the QCA board has announced that its chief executive, Dr. Ken Boston, and Mr. David Gee, the managing director of the National Assessment Agency, have been suspended pending a full board inquiry into Lord Sutherland's findings. The QCA board has, with our agreement, appointed Mr. Andrew Hall, currently its director of strategic resource management, as interim chief executive while that inquiry takes place.
	Lord Sutherland's report also makes recommendations covering the procurement process; the role of Department for Children, Schools and Families officials and Ministers; the role of Ofqual; and the procurement and delivery of future tests. On the procurement of the contract with ETS by the QCA, Lord Sutherland concludes:
	"The procurement procedure was sound",
	but he highlights the fact that, despite
	"sound checks on the financial strength and liquidity"
	of the supplier and two Office of Government Commerce gateway reviews, the procurement
	"failed to identify relevant information"
	regarding the supplier's
	"reputation and track record."
	Lord Sutherland finds that
	"In future, QCA should seek better information on the knowledge, capacity, experience, and track record of its preferred test operations supplier".
	Although this is not an explicit recommendation of Lord Sutherland's report, my permanent secretary David Bell has today written to Nigel Smith, chief executive of the Office of Government Commerce, asking him to consider whether there are wider lessons from Lord Sutherland's report for OGC gateway reviews. We will report on that in January as well.
	On my Department, Lord Sutherland finds that
	"DCSF had comprehensive mechanisms in place to monitor QCA's overall corporate performance and delivery against specific success measures".
	He also says:
	"In practice in 2008 what happened was that DCSF observers escalated their own assessment of risks to the DCSF ministers on a number of occasions. On this basis, ministers usually pressed the QCA Chief Executive for answers. At this point, because information was not being escalated within QCA effectively",
	the consequence was that
	"ministers were given strong reassurances, by QCA that all was on track. As late as 17 June when the Schools Minister met QCA's Chief Executive and NAA's Managing Director, they provided reassurances."
	Lord Sutherland also confirms in his report:
	"In practice, the first time QCA notified Ministers that ETS would not deliver test results on time was 30 June 2008"—
	four days before I announced that the tests would be delayed and Ofqual and I launched Lord Sutherland's independent inquiry. While Lord Sutherland concludes that
	"DCSF had good project and risk management processes and a pragmatic approach",
	he does say that
	"officials may not have challenged QCA sufficiently on its project and risk management of the tests".
	He also recommends:
	"The role of DCSF observers to meetings such as the operational, programme and corporate boards should be clarified on a case-by-case basis and those expectations articulated clearly".
	That is an important recommendation, and I will report in January on how we can further strengthen and clarify those governance arrangements.
	On regulation, Lord Sutherland
	"welcomes the creation of Ofqual as an independent regulator of National Curriculum tests as a positive development, and believes it represents a significant improvement on the previous arrangements".
	However, he identifies some weaknesses to be addressed and makes recommendations to strengthen and clarify the role of Ofqual. In her letter to me today, the chair of Ofqual, Kathleen Tattersall, confirms that she has also accepted those recommendations in full. We intend to legislate accordingly in the children, skills and learning Bill.
	On test delivery, Lord Sutherland makes recommendations on how procedures can be modernised and improved in future years. As I told the House in a statement on 16 October, with Lord Sutherland's advice, the QCA tendered for a single year contract for the delivery of the 2009 national tests. Last week, following the receipt of his report, I wrote to Lord Sutherland asking him to advise me on the QCA's handling of the procurement process, and I have published his reply to me this afternoon.
	In my statement to the House in October, I said that I agreed with the Select Committee that the principle of national testing is sound. I announced that we will not require pupils to take key stage 3 tests from 2009 onwards, but that externally marked key stage 2 national curriculum tests are essential to give parents, teachers and the public the information they need about the progress of each primary age child and of every primary school. I also said, however, that the current testing and assessment regime is not set in stone; that we will continue to look at the emerging evidence from our single level test pilots; and that I had asked our expert group to report in the spring.
	I know that there are some who do not agree with me about the importance of externally marked national tests, but even they will agree that where we have national tests, they should be delivered successfully and on time, as they have been in the past. That did not happen this year. As Lord Sutherland concludes:
	"It is undoubtedly the case that pupils were let down."
	I am determined to ensure that this does not happen again, which is why we will now implement all of Lord Sutherland's recommendations in full. I commend this statement to the House.

Michael Gove: I thank the Secretary of State for his kindness in sending me prior notice of his statement and also in allowing me to read Lord Sutherland's report in his Department earlier this afternoon.
	The Sutherland report is an epic catalogue of incompetence, inefficiency and blinkered inactivity in the delivery of a vital public service. It paints an unremittingly depressing picture of the fiasco that was this year's national curriculum test process. It points the finger at a series of figures, some of them still in office, who did not act as they should have done to safeguard the interests of our children.
	May I express agreement with the Secretary of State that Lord Sutherland does us all a service in revealing that the company responsible for running those tests, ETS, was guilty of a series of fundamental mistakes? May I also ask the Secretary of State how ETS was allowed to get a multi-million pound contract in the first place? The procurement process that led to ETS getting its contract took 10 months. As well as a huge team of bureaucrats, the accountants PricewaterhouseCoopers were asked to scrutinise the company's credentials, but in all that time not a single person uncovered the fact that ETS had a record of failure and poor performance in America.
	Conservative Members supplied Lord Sutherland's inquiry with a dossier of ETS's past failures, and he records that the stories we uncovered
	"were not identified and considered as part of the due diligence"—
	[Hon. Members: "Shameful!"] It is entirely shameful.
	Lord Sutherland further recommends that the QCA should have carried out the due diligence that we carried out to assess potential suppliers' track records. It took us 10 minutes on the internet to find out what the whole of Government could not establish in 10 months. How can Ministers ever have been satisfied with a procurement process that did not identify the most basic problem with a bidder—serial incompetence in the past?
	I am grateful to the Secretary of State for the fact that the Government will now change the way in which they award contracts, but given the horrendous failure of the procurement process, will he explain why we still cannot see the original contract with ETS? We have still ended up paying money to ETS for its failure. Why did the contract not specify that ETS would pay fines rather than just have payments docked when it failed? In a case such as this, as the hon. Member for Wolverhampton, South-West (Rob Marris) indicated earlier, the taxpayer should be compensated. We can judge whether our interests were properly safeguarded only if the contract is made public. So why can we not see it?
	Blame for what went wrong properly rests on many shoulders. ETS has paid the price, although not as heavily as it should, and the QCA's chief executive, Ken Boston, has rightly resigned, but Ministers have argued that their responsibility is limited because the process of managing those tests was at arm's length—the Pontius Pilate defence.
	In the House on 22 July, the Secretary of State said that Ministers did not even see the contracts drawn up with ETS, yet in evidence to Lord Sutherland, Ken Boston pointed out:
	"Government is at arm's length only from the detail of the test questions and from the marking and level-setting... throughout the process of procuring the contract and delivering the tests... Ministers and officials had access to exactly the same data and information as the QCA—they were active participants in the process".
	Does the Secretary of State accept his Department's share of responsibility? Does he accept that Ministers were active participants in this fiasco? Or does he think Ken Boston was lying?
	The Sutherland report also reveals that Department for Children, Schools and Families officials sat in on the crucial meetings throughout 2007 when flaws were revealed with the handling of those tests. Lord Sutherland points out that problems were raised at the Department's own senior management review group in February 2008. He reports that DCSF observers escalated their own assessment of risks to Ministers on a number of occasions in 2008. Will the Secretary of State tell us when those occasions were? Will he tell us why, when his officials were escalating their assessment of risk, he did nothing?
	The Secretary of State said that it was not appropriate for him to challenge the complacent judgment of those delivering the tests, but the facts about failure were in the public domain long before he took any action. When we raised problems concerning ETS and its track record in May, the Secretary of State told us that matters were on track, and he did nothing.
	On 11 June, the Minister for Schools and Learners told us that he had been in regular contact with the test delivery body, the National Assessment Agency, but the Sutherland report reveals that the first time the Minister had a substantial discussion with the man in charge of the NAA was only on 17 June, one week later. How does the Secretary of State explain such culpable inactivity? Does he not regret the fact that Ministers did not act earlier? Why, when his officials knew what was going wrong, his Department's review group knew that things were going wrong and we told him that they were going wrong, did he ignore all these warnings? Why were so many signals flashing danger so studiously ignored?
	It is crucial that we have confidence in national curriculum tests. They are vital measures by which we hold schools and heads accountable. It is only fair that those in charge of this process are also held accountable. This Government have failed, and no Minister has acknowledged their role in this failure. Until they do, parents and teachers will conclude that this Government believe that everyone should be accountable for failure apart from them.

Edward Balls: I completely agree with the hon. Gentleman that there was a clear failure, and that is why we commissioned an independent report. The report makes it clear that the primary failure was a failure by ETS, the supplier, but there was also a failure of the QCA to deliver on its remit. That is where the failure lies, and it is where the recommendations for action are. It is clear from the comments that I made in my opening statement that Lord Sutherland himself said that
	"the first time QCA notified Ministers that ETS would not deliver test results...was 30 June".
	He makes it clear in a litany of comments throughout the report that there was a systemic failure by NAA and QCA executives to assess risks properly, and then to pass those risks to the board and to Ministers. That is where the failure lies, and it is a failure that we will address.
	The hon. Gentleman asked about procurement, and I repeat what I said in my statement. Lord Sutherland says that
	"The procurement procedure was sound",
	and he notes that there were two Office of Government Commerce reviews into that procurement procedure, the first of which gave a green light to the procurement, and the second of which gave an amber light because of a payment issue, which was subsequently resolved. As the Minister for Schools and Learners said in his evidence to Lord Sutherland,
	"in this case, two OGC reviews satisfied me that there had been proper oversight of the process and that the QCA Board in turn, that we appoint, had approved it and had in fact endorsed it very strongly as an example of best practice."
	We know, and Lord Sutherland says, that while there was proper due diligence on financial strength and liquidity, the reviews did not look at the 180 countries in which ETS operates, or the 2,600 staff that it employs all around the world, to find some of the examples that subsequently came to light. I say, quite rightly, that that was a failure. It was a failure in the procurement process, and a failure that should have been spotted, as Lord Sutherland says— [ Interruption. ]

Mr. Deputy Speaker: Order. Questions have been put to the Secretary of State and he should be given a chance to answer without a chorus of protest at the same time.

Edward Balls: If hon. Members had taken time to read the report, they would have found that the answers are right here on the page. I am afraid that their questions betray the fact that they have not yet had time to study the report.
	We have asked the OGC to implement Lord Sutherland's recommendation that in future we should ensure that such information comes to light. When the information came to light in May, as the hon. Gentleman knows, I had a phone call and a meeting with Mr. Ken Boston, who assured me in a meeting on 2 June that things were on track with the delivery of the tests in 2008. The hon. Gentleman asked what Ministers did, and I just say again that in February, March, April, June and July, Ministers were informed by DCSF officials that there were concerns.  [Interruption.] I will state what Lord Sutherland says, because he conducted the independent review:
	"On this basis, ministers usually pressed QCA's Chief Executive for answers."— [Interruption.]
	Well, the word "usually" means that that is what they did, and that is what we did on 2 June and 17 June. Lord Sutherland continues:
	"At this point, because information was not being escalated within QCA effectively, ministers were given strong reassurances by QCA that all was on track."
	The assurance I gave the hon. Gentleman was the assurance we were receiving from the QCA. It was the responsible body and it had the remit to deliver those tests. It failed to deliver that remit, as Lord Sutherland's report— [Interruption.] Well, I advise the hon. Member for Beverley and Holderness (Mr. Stuart) to read the report; as a Select Committee member, I am sure he will.
	We did not take the advice of Conservative Members, however. We did not take the advice of the Leader of the Opposition, who throughout July repeatedly called on us to sack summarily the contractor, ETS. As the legal advice made clear to me, if we had done so we would have been in a legal dispute with ETS, and we would not have got the £24 million back to the taxpayer, which we secured in August. Throughout July, Opposition Members, having made no comment on this matter at all until May, grandstanded time and again, calling for steps that would have cost the taxpayer millions of pounds. We did the proper thing, which was to ignore their calls, their grandstanding and their irresponsibility; instead, we did the right thing by the taxpayer, and that is what I am determined to do.
	The fact is that, as Lord Sutherland's report makes clear, there was a delivery failure by the QCA. The leaders of the QCA and of the part of it that delivered the test, the NAA, have both now been suspended. There are a number of recommendations, all of which will be implemented in full. That will not repair the damage of the tests this year, and I cannot take away the inconvenience suffered by pupils and teachers. What I can do, however, is take seriously the conclusions of an independent inquiry that clearly says where the blame lies, and act upon that to ensure that in future we return to the way things were before ETS Europe, with a proper delivery of tests in our country.

David Laws: I, too, thank the Secretary of State for giving me early sight of both his statement and Lord Sutherland's report.
	On page 30 of the report, which was issued today, Lord Sutherland quotes the chairman of the QCA back in December 2006 rather optimistically suggesting that this contract might eventually be seen as a case study in best practice. Sadly, what Lord Sutherland has reported seems to be a masterclass in incompetent project management, with ETS, the NAA, the QCA and perhaps Ministers to blame in varying degrees.
	First, I want to make it clear that I support the action that the Government have taken so far in removing the contract from ETS and in changing the management of the QCA and the NAA. Those actions are justified by the information provided by Lord Sutherland. However, I am not quite so clear that the Secretary of State's statement is satisfactory in relation to the role of his Department and Ministers. Indeed, his statement could be summed up as follows: "Everybody is to blame other than Ministers." Even officials in his Department get the blame, along with ETS, the QCA and the NAA.
	May I take the Secretary of State back to two points raised by the hon. Member for Surrey Heath (Michael Gove), which I fear he did not respond to? First, the Secretary of State quoted paragraph 4.137 on page 85 of the report. It suggests that what happened in 2008 was that his Department's observers escalated their own assessment of risks to Ministers on a number of occasions, and it goes on to say that
	"ministers usually pressed QCA's Chief Executive for answers."
	A moment ago, the Secretary of State seemed to indicate that "usually" means "always", but it does not. Therefore, after today's sitting, could he send the hon. Member for Surrey Heath and me a list of all the occasions when DCSF observers raised these issues with Ministers, and will he describe what the concerns were on each occasion and how Ministers decided to act, if at all?
	Will the Secretary of State also return to another point raised by the hon. Member for Surrey Heath? On page 37 of the report, Lord Sutherland quotes Ken Boston of the QCA, who wrote the following in evidence as recently as three weeks ago, on 27 November:
	"Throughout the process...ministers and officials had access to exactly the same data and information as the NAA and the QCA; they were active participants in the process; and...were...in no way at 'arm's length'."
	Is that not the clearest possible signal, given just three weeks ago, that the head of the QCA was anticipating that he and the NAA would be expected by Ministers to shoulder the full responsibility? He clearly does not believe that that should fall only to the QCA and the NAA. Did the Secretary of State request Ken Boston's resignation or was that offered by the chief executive of the QCA on an entirely voluntary basis? Let me make it clear to the Secretary of State that I am not suggesting that ETS, the NAA and the QCA do not have the primary burden of blame, because they clearly do. I am suggesting that it is also the case that Ministers appear to be asleep at the wheel and that they should accept some responsibility.
	May I raise three brief final points about the future of the key stage tests? First, we understand from one of the letters that the Secretary of State has issued today that he—or the QCA—will be releasing information today on the number of appeals against the 2008 test results and what proportion of them have been upheld. Why was that information not available to the House before this statement, and can he shed some light on that today? Secondly, does he accept that, given the short time scale before the key stage 2 tests in 2009, Ministers will need to accept direct oversight and responsibility for ensuring that those tests are delivered effectively? They will not be able to get away with distancing themselves in the way that they have done this year.
	Thirdly, and finally, may I ask the Secretary of State about the future of key stage 2 national tests? May I suggest that those should be retained and that he should not proceed with the single level tests? However, in the review that is under way, will he ensure that the opportunity is taken for a fundamental reappraisal of what is being tested and of the scope for improving and streamlining the tests and for using more internal assessment, complemented by both external assessment and external checks? If he manages this review effectively, it is still possible that we will salvage something from the shambles that Lord Sutherland describes so effectively today.

Edward Balls: Let me answer the hon. Gentleman's questions first. I shall ensure that the expert group does a thorough job, and I will forward its conclusions on future testing to the House. We will need to make future decisions at that point, because as I have said, the regime is not set in stone. However, I disagree with his proposals for key stage 2 tests.
	The review process is ongoing, but the evidence we have so far on the number of reviews is that it has increased. Out of a potential 3.9 million applications for review, the total number of review applications that have so far been received and processed is less than 200,000. That compares with 50,000 in the previous years. That may partly be to do with heightened concern because of this year's events, but the change to borderlining will also have led to a substantial increase in the number of reviews. I cannot give the hon. Gentleman an answer as to which of those two things has been more important, but I shall keep him and the House updated on those figures.
	I will also ensure that the procurement process is properly managed. Indeed, I hope that the letter from Lord Sutherland that I have released today, which says that he will continue to oversee how the procurement works, will give the hon. Gentleman some assurance.
	The hon. Gentleman is right to say that this was a case study in poor risk management. That is made very clear in Sutherland's report, but it is also clear that the contract was delivered at arm's length from Ministers by trusted delivery partners in the QCA and NAA. On repeated occasions, the QCA and NAA at executive level failed to escalate risks upwards to the board and to Ministers, who were given repeated assurances that things were okay when they were not. Those executives then failed to follow up problems when they were identified. I read out the quote from Lord Sutherland because it is telling. It points out that time and again during 2008 my officials and Ministers raised questions with the QCA and were reassured that things were okay.
	Usually, it was the chief executive of the QCA, Ken Boston, who responded, but sometimes it was the managing director of the NAA, David Gee. Whichever it was, they reassured us that things were on track. As Sutherland says, it was only on 30 June that it was brought to our attention that tests were being delayed—

David Laws: No, it was not.

Edward Balls: Well, I advise the hon. Gentleman to read the Sutherland inquiry. It says, in terms and as I quoted in my statement, that in practice it was only on 30 June that Ministers were informed by the QCA that there would be delays in the tests. There was a meeting on 17 June, as my right hon. Friend the Minister for Schools and Learners asked for a meeting with David Gee and Ken Boston because he was concerned about the advice that he had had from DCFS officials—not from LEAs or the QCA. My right hon. Friend asked for that meeting, in which Ken Boston deferred to David Gee who assured my right hon. Friend that things were on track. In retrospect, David Gee got that badly wrong, but it was our job to ask our delivery agent to deliver. We regularly asked questions and we were told that they were delivering. It is all substantiated in the report.
	The delivery failure was by the QCA and the NAA, and Lord Sutherland is very clear on that point. Ken Boston said in his evidence that the information that was being made available to him was also being made available to Ministers and our Department. The problem was—as the report makes clear—that he did not have a management system in place that meant that concerns in the NAA were escalated up to him. In fact, months earlier, the NAA had a red risk rating and put scores of its own staff in to run the ETS contract, while telling Ken Boston that things were okay. But when he knew about the red risk ratings he did not act, and he assured us that things were okay. We did not have all the same information, but in any case it was his responsibility to act and he did not do so. That was the problem, and that is why the suspensions have occurred. That is why the inquiry was carried out, and that is why Sutherland says that while the primary responsibility was with ETS Europe, there was a failure on the part of the QCA to deliver.
	There was a fundamental failure of the QCA to deliver, but with a new chair, an interim chief executive, these recommendations from Lord Sutherland and this independent report, we can move forward. That is what we are determined to do.

Barry Sheerman: My right hon. Friend will know that the Children, Schools and Families Committee is undertaking an ongoing investigation into these matters, which also takes in the contract for education maintenance allowances. As part of that, we will take evidence from Ken Boston and Lord Sutherland in the new year.
	May I ask my right hon. Friend just two questions today? First, we all understand the game of "Get the Secretary of State" that is being played between the parties, but does he regret—

Daniel Kawczynski: What a ridiculous thing to say. It is not a game.

Barry Sheerman: I just want to ask three questions—

Mr. Deputy Speaker: Order. There has just been 50 per cent. inflation in the hon. Gentleman's demands. I am anxious to have single questions as there is important business still to be transacted in the House.

Barry Sheerman: I just want to ask the Secretary of State whether he now regrets the advice that he was given to publish 90 per cent. of the tests immediately. Does he think that that would have solved the problem? Does he think that too many cooks spoiled the broth, because of the shadow authority? Thirdly, will he say one word about Ken Boston, who I have found to be a fine public servant in my experience as Chairman of the Select Committee? Ken Boston might have made mistakes on this contract but somebody should say that he is a fine public servant. He might have made a mistake, but we should not forget his record over a number of years of change to qualifications and to the curriculum in this country.

Edward Balls: I am happy to put on the record my thanks to Ken Boston. I worked with him over the past year and a half and thought that he delivered the key stage 3 reforms, which have been widely welcomed in schools, extremely well. We never had a difficult word, but I regret, as does Ken Boston now, that when he gave me reassurances in face-to-face meetings that things were on track, that turned out not to be the case. I am very sorry about what has happened today, but we are where we are and we have to move forward.
	I know that the Select Committee is doing its review and I will ensure that my more detailed response is provided to my hon. Friend so that we can give evidence to that Select Committee. I hope that by then the Opposition members of the Committee will have had a chance to study it, because that might mean that they will be rather more informed in their barracking in the Committee.
	I do not accept the point about the shadow authority, but I accept the point about too many cooks spoiling the broth. The NAA was a division of QCA, with no separate independent function. The QCA chief executive was responsible to the board for the delivery of tests, not the NAA, although the NAA was a member of the executive board. The QCA has today taken the step of removing the NAA label, which, I believe, got in the way. Sutherland makes it very clear that that label confused accountabilities and allowed Ken Boston to manage things at arm's length, which was not the right thing to do. My hon. Friend is right on that point.
	Sutherland makes it clear that it was a problem when the regulator was within the QCA and not a distinct organisation. The appointment of an independent regulator in the form of Ofqual represented a significant step forward, and Sutherland says that that has made things better. They will be better still when we finally have the necessary legislation on the statute book. We can do certain things now to implement Sutherland's recommendations, but there is no evidence in the report that the establishment of Ofqual in shadow form made things worse. In fact, the Sutherland report shows that it made things better over the past few months.

Tim Boswell: The Secretary of State will be aware that I previously served as a Minister in his Department. We had our share, too, of administrative difficulties of the kind that he has described today, although not on the same scale. Will he reflect first on the fact that non-departmental public bodies should never be used as a smokescreen for any inefficiency on the part of Ministers? Secondly, will he at least search his conscience to satisfy himself, because if everybody else has failed, it is miraculous that Ministers have somehow absolved themselves from any share of the blame? Finally, and much more importantly as we look forward, will he explain to the House why, if he and his senior management were free from blame, the situation is likely to be different on any future occasion when it comes to reporting, asking the salient questions and getting the right result?

Edward Balls: I searched my conscience, and I also asked Lord Sutherland to carry out an independent review. Not only did I search my conscience, but I read that review, which clearly states that the way in which we set up the arm's length relationship with QCA was right and normal practice and that the blame lies in the failure of risk management and the escalation failure in QCA and ETS. If the hon. Gentleman can find in the copy of the report that he has in front of him a quote that shows that I failed in my duty as Secretary of State, he should read it out. His Front-Bench spokesman failed to make any such point—

Michael Gove: Answer the question.

Edward Balls: I have answered the question so many times—it is so trivial.
	I have searched my conscience. I asked for an independent report and I have responded to it. The implementation of the report's recommendations will ensure that such things will not happen again. The right way to proceed was to commission an independent inquiry, to read the report and to act on it. That is what I am doing and that is why my conscience is clear.

David Chaytor: Given the difficulties this year, particularly those about the number of opinions and the changes to the borderlining practice, is there any point in publishing the key stage 3 results on a school-by-school basis? Should we not now simply put key stage 3 to bed and forget about it? On key stage 2, does the Secretary of State accept that it is possible to support a policy of national testing without requiring every child in every school to sit a test every year in each of the key subjects at the same time? There are other forms of perfectly valid national testing that could be more effective and would certainly be cheaper. On the NAA, the Sutherland inquiry refers to the ambiguous relationship between the NAA and the QCA. Will the Secretary of State assure the House that there will be no ambiguity whatever in that relationship in the new legislation that will disaggregate the QCA?

Edward Balls: I shall definitely ensure that there is no ambiguity. We will use the processes that we are now going through with the expert group to ensure that what we do is not only cost-effective but effective in the way in which we test. That is our challenge. On my hon. Friend's particular point, we will publish the national figures for key stage 3 results. Given my announcement in October, I do not think that it makes sense to put schools through the process of checking the individual results school by school and so it is not my intention to do so.

Edward Timpson: The Secretary of State is right to characterise this whole sorry episode as a complete failure that has let pupils down very badly. As the right hon. Gentleman is lending a great amount of weight to the recommendations in the report, will he look again at the EMA payments and the delays and consider whether a separate independent inquiry should be forthcoming in that regard? Recommendations might well flow from such an inquiry that he would want to take on board.

Edward Balls: That issue is currently being looked at by the Select Committee, which is the right forum for that purpose. What has happened with the EMAs has been unacceptable, but it is clear why it happened and the Select Committee will consider the subject. I do not think that an independent review is the right way to proceed, but I am happy to listen to and give evidence to the Select Committee to ensure that if there are any lessons to be learned in the case of EMAs, we will learn them.

Fiona Mactaggart: The Secretary of State said in his statement that Lord Sutherland concluded that the procurement procedure was sound, yet it is clear from the report that although the procedure underwent two OGC gateway reviews as well as the expensive involvement of PricewaterhouseCoopers, the procedure did not produce good value for money for the taxpayer. Is there not an issue about the entire procurement? What steps will my right hon. Friend take to ensure that the Government learn the lesson from this procurement exercise and ensure that we put more emphasis on good value for the taxpayer in the future? What action will he take to ensure that pupils, schools and markers feel confident in next year's tests?

Edward Balls: My hon. Friend is right to stress "pupils, schools and markers", because markers had a raw deal in the summer. The customer service to markers from ETS was frankly unacceptable and that must improve in the future. That is why we are returning to the tried and tested methods with the previous deliverer of the tests, Edexcel, as announced yesterday by the QCA. I will ensure through the work that we will now do with the OGC that if there are wider lessons to be learned on procurement, we will learn them.
	It is the case that Lord Sutherland says that the procurement procedure was sound, and he explains why in detail, but we must do everything that we can to deliver value for money. One thing that would definitely not have delivered value for money would have been to forfeit the £24 million that the taxpayer got back. That would be to give in to the Opposition's irresponsible political posturing, which I was completely right to ignore.

Graham Stuart: May I begin by congratulating the Secretary of State on saying sorry today? He was unable to bring himself to do that in October, and I am sure that his apology will be appreciated.
	The report comments on the responsibility of Ministers and, as both Opposition Front-Bench spokesmen have noted, on page 37 it quotes Ken Boston as saying that
	"ministers and officials had access to exactly the same data and information as the NAA and the QCA; they were active participants in the process...and in no way at 'arm's length'."
	That is what Ken Boston said: was he lying?

Edward Balls: It was said by Ken Boston, who was suspended this afternoon by the QCA board on the basis of a report that said that Ministers were not properly informed. It also said that information was not provided properly by the NAA to the QCA executive, by the QCA executive to the board, and by the QCA executive and the board to Ministers. We had reassurances that things were okay, even though the NAA had information that they were not.  [ Interruption. ] If he wants to, the hon. Gentleman can quote again and again from the remarks that Ken Boston made to Lord Sutherland, but I think that those remarks reveal the nature of the problem and why we needed to act. That is what we have done.

Rob Marris: The QCA appears to have failed, and it seems that it is going to be transformed into two quangos. The Learning and Skills Council seems—to me and many others, and I think to the Government—also to have failed, and it is to be transformed into three quangos. One of them will rejoice in the initials "SFA", and one wonders what it will do. I am confused about the approach adopted by the Department for Children, Schools and Families and the Department for Innovation, Universities and Skills as, when quangos fail, they seem to be replaced by new and more quangos. Can the Secretary of State explain that to me?

Edward Balls: I can explain that to my hon. Friend. There was a body called the QCA. That single body was responsible for the procurement, management, delivery and regulation of tests and, clearly, it did not succeed. We have decided to have one organisation to procure, manage and deliver the tests, and a separate organisation independent of Government called Ofqual to regulate them.  [ Interruption. ] I thought that the Opposition supported the establishment of Ofqual, although the comments being made by Conservative Members suggest otherwise. However, it is right to split delivery and regulation, and that is what we are doing. Lord Sutherland makes it clear that, in his view, that approach will strengthen the regime and lead to more confidence for teachers, pupils and markers in the future.
	In this case, I believe that we are doing the right thing, although I agree that the proliferation of quangos is not always ideal.

Angela Watkinson: The number of papers with questionable results that have had to be returned this year has increased dramatically this year, and that has caused huge anxiety among pupils and imposed an administrative burden on schools. Will the Secretary of State ensure that his proposals will not also be a financial burden on school budgets?

Edward Balls: The position is clear: a school pays a financial penalty only if a review is unsuccessful. That is an important principle, as it means that it is not possible for there to be review after review. If there were no financial cost to a litigious review, everyone would appeal. We have had 200,000 reviews this year, compared with 50,000 in 2007, and it is estimated that a further, and final, 18,000 review outcomes will be issued to schools. The rise is partly due to concern about test marking, although in her letter to me today the head of Ofqual makes it clear that she retains the view that she expressed in July—that marking standards were maintained and that there was no decline in marking quality.
	The review process will continue and, as I have said, we decided some years ago to remove borderlining. Its abolition means that cases that in the old days would have been allowed a bit of an upgrade do not receive one now. That will have led to an increase in the number of reviews, but it is really important that the review process is undertaken properly and with integrity. A school that succeeds does not pay the fee, whereas one that fails does.

David Taylor: It is certainly true that faith among teachers, parents and families in national curriculum testing has been badly hit by what has happened. Further to what my hon. Friend the Member for Slough (Fiona Mactaggart) said, it is hard to conclude that the procurement procedure was sound, when the reputation and track record of ETS and the capacity of its staff were not flagged up.
	The dogs that did not bark seem to have been the OGC and its gateway reviews. That body had similarly lamentable failures with the Rural Payments Agency saga some time ago, but another problem has to do with PricewaterhouseCoopers. Will the Secretary of State say whether there exists in the public domain copies of the brief given to PricewaterhouseCoopers and of the report that was received from the company—no doubt at some great cost that we shall never know?

Edward Balls: At paragraph 2.59 of his report, Lord Sutherland says that
	"the procurement procedure followed by PricewaterhouseCoopers and NAA on behalf of QCA was sound. It used the most up-to-date technique, Competitive Dialogue, which enabled QCA to refine its requirements and suppliers to develop their proposals during the procurement exercise."
	That was then endorsed by two OGC reviews. I have found no reason in the Sutherland inquiry to fault PricewaterhouseCoopers, other than the fact that there should have been the exercise of wider due diligence that should have been picked up by the OGC. That is one of the recommendations that I am acting on.
	As for the wider financial information about PricewaterhouseCoopers, I shall have to come back to my hon. Friend the Member for North-West Leicestershire (David Taylor), as I do not have the answer in front of me.  [ Interruption. ] I do not have the answer in front of me, so I shall have to get back to my hon. Friend.
	I asked Lord Sutherland to look at procurement in 2009. He has done so, and in his letter to me he says:
	"It appears that a very thorough risk assessment has been conducted, which I believe is an essential component of any good procurement process. It will now be important to ensure that these risks continue to be actively monitored and addressed throughout the duration of the contract."
	I have today asked the QCA's new leadership to make sure that that happens. We are very aware of the matter, and it is one of the lessons from the Sutherland inquiry. In all cases, the Government will make sure that the recommendations are implemented properly, because that is the right way to rebuild confidence in testing for the future.

Points of Order

Daniel Kawczynski: On a point of order, Madam Deputy Speaker. On 3 December, during the Queen's Speech debate, I intervened on the Prime Minister to ask when the Government would formally produce a response to the parliamentary ombudsman's report on Equitable Life. He assured me, in this Chamber, that the Government's response would come before the House of Commons before the Christmas recess. That has not happened, and it will not happen now. I am appalled that the Prime Minister should make a commitment of such magnitude and then renege on it. Is there any chance that we could bring him before the House to explain himself?

Madam Deputy Speaker: That is not a point of order for the Chair. However, the hon. Gentleman's comments are on the record and of course this House still has two further days to sit before the Christmas recess.

Kevin Barron: On a point of order, Madam Deputy Speaker. The Chair of this Chamber has a great tradition of protecting the interests of Back Benchers, but today is estimates day and Back Benchers have lost some 2 hours and 38 minutes of debate on those estimates. Is there any way that Back Benchers can be protected, so that our Select Committee reports can be discussed without any loss of time for debating other matters such as we have witnessed this afternoon?

Madam Deputy Speaker: I understand the right hon. Gentleman's concerns, and that it is important for Back Benchers to have the opportunity to contribute to debate. Again, I shall make sure that his remarks are brought to the attention of Mr. Speaker.

Estimates Day
	 — 
	[1st Allotted Day]
	 — 
	VOTE ON ACCOUNT, 2009-10
	 — 
	OFFICE OF GAS AND ELECTRICITY MARKETS

Energy Prices, Fuel Poverty and Ofgem

[Relevant Documents: The  Eleventh Report from the Business and Enterprise Committee, Session 2007-08, HC 293, on Energy prices, fuel poverty and Ofgem, the Government response,  HC 1069, Session 2007-08, and the First Report from the Committee, Session 2008-09, HC 32, on E nergy policy: future challenges.]
	 Motion made, and Question proposed,
	That, for the year ending with 31 March 2010, for expenditure by the Office of Gas and Electricity Markets—
	(1) resources, not exceeding £315,000, be authorised, on account, for use as set out in HC 1039 of Session 2007-08, and
	(2) a sum, not exceeding £700,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs as so set out.— (Chris Mole.)

Peter Luff: This is the last occasion on which my Committee, the Business and Enterprise Committee, will initiate a debate on energy policy. We have produced our last report, so this is something of a nostalgic occasion, although it will be much briefer than I had hoped. I would like to associate myself with the remarks of the right hon. Member for Rother Valley (Mr. Barron), the Chairman of the Select Committee on Health. When there are so many Government statements on a day on which there are important matters to debate, injury time should be added to our proceedings, so that all those who want to participate can do so. It is very regrettable that we are down to less than two hours for each of today's two important debates.
	The Government were right to create a new Department of Energy and Climate Change given the importance of the issue of energy, but it is a policy area that members of my Committee and I will miss greatly. It is an endlessly fascinating policy area, with economics, domestic politics, science, geopolitics, social policy and many other considerations forming part of the mix. The policy needs to reconcile three often conflicting aims: security of supply, affordability and sustainability. For example, achieving sustainability often means subsidy and cost, and that is paid for by the consumer, which means higher prices. Security of supply means investment, and that means reasonable profits for the energy companies, which means that prices must move with markets—and with the imperfect wholesale markets, too.
	At the start of the year, the six main energy companies announced double-digit price hikes for their retail gas and electricity consumers. Not surprisingly, those steep increases were met with howls of protest from consumers, politicians and the media.  The Sunday Times even went as far as to say that the big six were operating a cartel. The firms told us that they were simply responding to rising wholesale prices. Understandably, the Chancellor and the Government wanted to appear responsive to consumers' concerns, so the Chancellor hauled the Office of Gas and Electricity Markets before him and demanded to know what was going on—perhaps surprisingly, as he had had responsibility for Ofgem only six months previously. Ofgem responded:
	"Britain's competitive market in energy is working."
	We did not believe the regulator. We called in the then Minister for Energy, the right hon. Member for Croydon, North (Malcolm Wicks), who is in the Chamber—it is a pleasure to see him here—in order to understand what was happening. His evidence was eloquent and elegant, as always, but I have to say that we were not totally reassured, so we launched our own inquiry. It soon transpired that Ofgem did not believe its analysis of the markets either, as the regulator launched its own probe into the energy supply market little more than two weeks after we had done so. We do not believe that Ofgem would have launched its probe had we not forced its hand. At the very least, our inquiry ensured that the regulator did its job properly. Its initial findings are a very thorough job of work. Our work turned into one of the largest and most complex inquiries that the Committee has ever conducted, and this debate marks its culmination, as we hand over responsibility to the new Committee in the new year.
	This debate is primarily about our July report, "Energy prices, fuel poverty and Ofgem" but also tagged is our most recent—and last—report, published last Friday, called "Energy policy: future challenges". Together, the two reports represent our main views on those complex issues, and I hope that the new Committee will study them carefully. I believe them to be politically and economically well-founded and, for such a complex subject, to be pretty readable, too. I want to thank all the Committee staff who worked so hard to ensure that the documents were published rapidly and efficiently. I am blessed with a great team in my Committee office, and I am proud of them all.
	Let me turn to the subject of wholesale oil and gas markets. Any discussion of energy prices must begin with the price of oil. At the start of 2008, the markets heralded a price of $100 per barrel—an amount that would have been unthinkable five years ago. Not content with one high watermark, the markets continued to push prices up for the first half of the year. By the time my Committee published its July report, prices had reached almost $150, and some pundits were predicting that the price would be $200 or even $250 by about now. Such expectations now seem laughable. The energy price bubble has met the same end as most other asset price bubbles; it was pricked by the harsh reality of a sharp economic downturn. That is not to say that the oil price will not reach such heights again—it probably will, but not in the short to medium term.
	The important point is that the price of gas and electricity are inextricably linked to that of oil. That is because the UK is no longer self-sufficient in its supply of gas, and must instead depend increasingly on imports, particularly from Europe. On the continent, for largely historical reasons, gas prices are linked to oil prices. There is no economic rationale for that at all, and no one could really explain to us why it persists, other than that it seems rather to suit the interests of the oil and gas companies.
	Gas supply from the UK continental shelf is falling rapidly, and almost all the new electricity generating capacity due to come online in the short to medium term will use gas. That means, it seems, that the UK's dependency on gas imports is set to increase. That poses major challenges for the Government. We have a liberalised gas market in the UK, but it is structurally tied to an unliberalised European market. UK gas prices rarely fall below European levels because our companies simply choose to export surplus production. That is particularly the case in the summer, when gas consumption is lower. In the winter, UK prices have to rise significantly above European levels to attract that gas back. That is part of the reason why we have seen such large spikes in the price of gas during recent winters.
	A further big reason is that the European markets have not liberalised in the same way as we have. There is not much that we can do about that, try as we might. Heaven knows successive Energy Ministers have tried, and I am sure that they will continue to do so.

Michael Weir: I agree with the hon. Gentleman's analysis, but does he not agree that the situation is even worse than that? In its evidence to the Committee, the Energy Intensive Users Group said that even when its members were in a position to take gas from continental suppliers, those suppliers would not supply it to them, so they could not take advantage of cheaper supplies on the continent, even where an interconnector existed.

Peter Luff: I am most grateful to the hon. Gentleman—a distinguished member of my Committee—for that remark. As far as I am aware, that issue has not yet satisfactorily been addressed. It seems to be a breach of the simple single market rules of the European Union, and I cannot understand that. It is a matter of great concern to the Committee, and I hope that it will be to our successors, too.
	On gas supply, the Government must take some of the blame for the current predicament. If we were able to store gas at times when it is cheaper, the UK would not suffer from the current volatility in prices. Our growing dependency on gas and the need for more storage was a car crash that the Committee, and its predecessor, saw coming years ago, and I am afraid that the Government have been very slow to react to it. We have just 13 days of storage capacity. Germany has 99 and France has 122. Even if all the projects under construction or with the required consents were built, we would add only another five days of storage by 2014. In other words, we need growth of a greater magnitude than that achieved to date if we are to match the Europeans and protect our vital national interests. Planning has been a problem in that regard, as it has been for many aspects of energy infrastructure. We can only hope that the new Infrastructure Planning Commission will help in that regard, although even if it does—there are some doubts about that—it will be some time before it begins to have an impact. The Government must move quickly to put in place a national policy statement on gas storage.
	Worryingly, planning is not the only important issue. The industry told us that the economic incentives for the market to build new storage simply did not exist until fairly recently. Those incentives have now been virtually wiped out by the collapse in energy prices, and by the reduced availability of financing resulting from the credit crunch. In simple terms, the market will not deliver. If new storage capacity is to be built on time, the Government must think again about the incentives that they can provide.
	Lack of gas storage is not the only problem with the wholesale gas markets. Companies have been investing in new infrastructure for liquefied natural gas imports to the UK. One of our main facilities is at the Isle of Grain. Its owners—BP and Sonatrach—have barely used it this year, choosing instead to send LNG to the far east, where economies are willing to pay more. Third parties have the right to use the facility, but none has done so this year. Ofgem has been dismissive of the possibility that the regulatory framework for gaining access might be a factor, despite several witnesses telling us that it is. We believe that Ofgem should look again at the issue. Otherwise, we will have concerns about the outlook for new LNG capacity at Milford Haven.
	Liquidity in the gas market is a major concern for the Committee. For those who want to buy gas to use right now, the UK has one of the most liquid gas markets in the world, but that is not the experience for manufacturers who want to hedge prices by buying ahead; they just cannot do that. The financial crisis has served only to reduce liquidity further. Ofgem and the Government—I hope that this will not be true of the new Department—do not seem to believe that that is a problem. The UK's manufacturing base has told us otherwise. When even an arm of government—the NHS Purchasing and Supply Agency—is concerned that there is
	"no effective long term market"
	for gas, the Government and the regulator should take notice.
	What about wholesale electricity? Failings in the wholesale gas market feed through to the wholesale electricity market, because 40 per cent. of our electricity comes from gas, and it provides the marginal source of generation in the UK—it sets the price. Our Committee found serious failings in that market, too. In 2008, electricity prices have been driven up, not just by higher gas prices, but because of environmental costs. For example, Ofgem reckons that since the start of phase 2 of the European Union emissions trading scheme, £9 per megawatt-hour has been added to the price of electricity, despite the fact that generators receive 93 per cent. of their permits free of charge. The Government estimate that the resulting windfall is about £2 billion a year over the five years of phase 2.
	No one knows exactly what the energy companies are doing with their windfall gains, which are distributed very unevenly between energy companies and generators. At first, the energy companies denied that the windfall gains even existed, and to the extent that they did admit to them, companies claimed that the value of the windfall had been passed on through lower prices or greater investment—investment that we need. The Government have rightly taken a different view in clawing back some of that money to tackle fuel poverty—that was one of the recommendations in our July report—but we are disappointed that neither they nor Ofgem has conducted a fuller analysis of what those windfalls were or how they were distributed.
	When the Committee published its report, the big six controlled 55 per cent. of electricity output, with the rest shared among the independent generators. In recent months, further consolidation has been promised, with the purchase of British Energy by the French company, EDF, which will own nearly a quarter of the UK's electricity output, with the big six controlling nearly three quarters of that output. Our report pushed the regulatory bodies to ensure that that consolidation did not affect the competitiveness of the market adversely, and I hope that the European Commission will have something to say about that when it reports on the acquisition of British Energy.
	Consolidation, however, was not our only concern. Many witnesses hid the fact that their companies owned both wholesale and retail arms—there was no transparency on where their profits were made. If other firms—potential new entrants—cannot see where profit-making opportunities lie in the value chain, it is easy to see why they are reluctant to enter the market to compete with the existing players, which is why we welcome Ofgem's decision, following the Government's prompting in response to one of our recommendations, to require the vertically integrated companies fully to disaggregate their accounts. That is an important, and big, step forward.

Michael Weir: Again, I agree with the hon. Gentleman, but does he not accept that there is a problem, as many of our energy companies are owned by multinationals, and it is even more difficult to find which part of their profits comes from the UK?

Peter Luff: The hon. Gentleman makes an important point with which I agree. It is something about which British Gas is particularly aggrieved, because it sometimes gets more of the blame than other companies because its profits are more visible than those of its competitors.
	Sadly, that is not the only issue facing new entrants. We found that the electricity market suffers from a profound lack of liquidity—a problem exacerbated by the financial crisis—which contributes to price volatility and poor price transparency. It contributed, too, to the exit of two of the largest independent electricity suppliers outside the big six in recent months. We welcome Ofgem's tough line on this issue, announced in its probe findings, and we hope that our successor Committee will look at the issue in detail. As it stands, the market discourages new investment in generation by new entrants, which leaves us heavily dependent on the big six to deliver the conventional capacity that the UK needs to replace the nuclear and coal-fired power stations that are set to close in the coming years. We are fearful that the economic and financial crisis will lead to delays in that much needed investment.
	That creates a serious risk, highlighted in our most recent report, that the UK could face an "energy crunch" in the coming years. As with gas storage, it is clear that the market could fail to make the necessary investments on time without intervention from the Government. Every month that we lose increases the risk of the lights going out, or of increased dependency on gas generation, or both. The Government have already said in their White Paper last year that security of supply is their top priority alongside reducing carbon emissions. They will now have to work very hard to ensure that those two objectives do not become mutually exclusive. For example, new coal-fired generation will be possible only if there is significant progress on carbon capture and storage, which requires a much greater level of investment from the Government. They must quickly make the relevant national policy statement on nuclear power, and learn from the recent Finnish experience of cost overruns and delays, if new nuclear is to play the role that they want in the future energy mix, and which I believe it is right to want.
	The retail markets receive most attention, and we uncovered many problems in the service provided to households and small businesses. I want to make it clear that neither we nor Ofgem found any evidence of the energy companies acting as a cartel, but they do not need to do so. Given that the market is dominated by just six players, it is easy for them to make informed judgments about one another's actions and position in the market. They do not need to collude, because the market is broken. Ofgem has, rightly, always advocated the benefits of consumers switching to realise the benefits of the liberalised markets. About half of households have changed either their electricity or gas supplier since liberalisation. Most of them have done so to benefit from a dual-fuel tariff or some other offer. However, 20 per cent. of households have never switched, and they are predominantly pensioners, people in social group E and those in rented accommodation—in other words, some of the most vulnerable people.
	Our inquiry and Ofgem's probe found that those consumers least likely or able to switch were most likely to be the victims of price-discriminatory practices by the energy companies. For example, suppliers charge their legacy customers—the ones who stay with them and do not switch—an average of 6 per cent. more for electricity than out-of-area customers. Suppliers earn much higher margins on electricity than on gas, thus disadvantaging 4.3 million households that are not on the gas main. Both standard credit and prepayment meter users are disproportionately overcharged compared with direct debit customers. I therefore welcome what Ofgem said today, but I want to highlight the issue and ram the point home: it is not just about prepayment meters—where standard credit terms operate, that is where the bulk of fuel poverty exists.

John Battle: rose—

Russell Brown: rose—

Alan Simpson: rose—

Peter Luff: I shall give way, first, to the right hon. Member for Leeds, West (John Battle), secondly to the hon. Member for Dumfries and Galloway (Mr. Brown), and thirdly to the hon. Member for Nottingham, South (Alan Simpson).

John Battle: Most of us welcome the Committee's work and the timely reports that it has produced. Does the hon. Gentleman agree that many of the 6 million people on prepayment meters in particular do not have bank accounts and cannot switch, so it is not an option for them? They pay £100 a year more than standard payers, and they pay £500 a year more than people on direct debit. Even under Ofgem's proposals, they will pay £51 a year more. Is it not time to end the iniquity of the poorest subsidising the rest of us, and to ensure that people on prepayment meters do not pay a penny more?

Peter Luff: The Committee's view on that point was very simple. There are additional costs involved in running prepayment meters, and it is essential that there is no excessive recovery of price beyond that actual economic cost. If the Government want to say that those people should pay the same price for electricity as people on other terms, some kind of subsidy is required—either a cross-subsidy from other consumers or a subsidy from the taxpayer. That is a perfectly legitimate thing to want to do, but I point out that a cross-subsidy from standard credit customers to prepayment customers would work against the interests of tackling fuel poverty. However, I accept the point that the right hon. Gentleman makes.

Russell Brown: May I, too, congratulate the hon. Gentleman and his Committee on their work? In recent weeks something has come to the fore that I discussed with interested groups in the summer recess, and it concerns people who pay by direct debit who have received demands from their supplier to increase their monthly payment. On a personal basis—and I let my good lady wife deal with this—I received a demand in recent weeks for an increase of 57 per cent. on what we previously paid. When my wife challenged that—that is the point: I have encouraged people to challenge those demands—the energy company reduced it to 17 per cent. The companies are taking people's money, putting it into their bank accounts, and they may well be dragging people needlessly into fuel poverty.

Peter Luff: I am grateful to the hon. Gentleman for making that important point, which I was going to mention later.
	I said some things about that to the BBC two or three weeks ago, and all hell broke loose. My e-mail inbox and my postbag have swollen to huge proportions, because there are many experiences like that. The essential weakness of the energy companies' position is that nine times out of 10, they reduce the price. When the Minister appeared before the Committee, he admitted that he had a similar experience with his direct debit. I have had a similar experience with mine. I know police officers, journalists and colleagues in the House who have all had the same experience. The problem is too widespread to be ignored. I gave a file of evidence to Ofgem, which is looking at what it can do to investigate the problem. It says that it lacks quantitative evidence but, my God, it has a lot of qualitative evidence. It needs to get on with it and look at this, because it is an important issue. If we want to move people on to direct debit terms to get the benefit of better prices, we must tackle other aspects of the deal that hurt those people, as could well be the case at present.

Alan Simpson: I, too, am grateful for the work of the hon. Gentleman and his Committee. Were they able to look rigorously at the weakness of Ofgem's claims about switching and the fuel-poor? The reality is that 1,000 households a week have been forced, as a result of fuel debt, to come off standard tariffs and on to prepayment meters, which is the only choice that they are offered. Even the argument that someone who has not been forced on to a prepayment meter could choose to switch to another tariff is not valid, because they do not have access. Conditions applied by energy companies say that to gain access to the best tariff people must have been a customer for at least a year before they can have such an entitlement. Those measures progressively exclude the fuel-poor, rather than include them.

Peter Luff: That is a powerful point. I strongly suspect that my hon. Friend the Member for Wealden (Charles Hendry) will make some observations about the Post Office card account when he speaks on behalf of the Opposition, and offer some proposals to deal with that issue. The hon. Member for Nottingham, South is absolutely right, but that is not the only concern, because we are concerned, too, about the number of people who switch on to higher tariffs. The evidence is that 20 to 32 per cent. of households move on to a higher tariff after switching, so it is a mess.
	On the specific issue of the fuel-poor and direct selling, recent evidence from Ofgem showed that 48 per cent. of gas customers and 42 per cent. of electricity customers who switched as a result of a direct sales approach—doorstep selling—failed to achieve a price reduction. Ofgem has proposed action, but we think that although direct selling plays a role in helping people switch, if it helps people switch wrongly, it is doing more harm than good and needs to be banned. We will look at that carefully.
	Incidentally, it is not just private individuals who are affected, but small and medium-sized enterprises. We heard compelling evidence of predatory pricing, delaying tactics to win back customers, and confusing contract cancellation requirements. We are glad that Ofgem is looking at the SME market as well, but it is sad that that has come too late for my constituency company, BizzEnergy, which has gone into receivership, and for Electricity4Business, which has been driven out of the market. The market is thus becoming less, not more, competitive.
	I would say a great deal more about fuel poverty, but time is against me and a number of colleagues wish to speak. Briefly, we believe that fuel poverty levels will reach 5.5 million. That figure is quite widely accepted. The Government will therefore fail to meet their target to eradicate fuel poverty for vulnerable households by 2010, unless there are sharp reductions in price in the future. In our reports, we asked for the Government to go back to the drawing board in their approach to fuel poverty.
	We asked for a mandatory definition of what constitutes a social tariff and who qualifies for it. We said that income-raising measures should be targeted more accurately at the fuel-poor, not only pensioners. Pensioners are not the only group in fuel poverty, just as prepayment meter customers are not. Disabled people and many other vulnerable groups are also in fuel poverty, and we need to take action to help those groups as well, particularly through levels of investment in the energy efficiency of our housing stock.
	We were very pleased to see the Government's £1 billion fuel poverty package, which we thought struck the right note. That will prove the most effective way of addressing fuel poverty in the long run. However, I repeat that we are very sorry that so little has been done to address the needs of the fuel-poor other than pensioners.
	Finally, our work over the past year has shone light on many problems in the UK's energy markets—energy markets of which we all thought we could be rather proud. That light caught the market's regulator, Ofgem, unawares. We feel as a Committee that we have set the agenda for Ofgem on too many occasions—for example, the direct debit issue was not being considered, but as a result of our Committee's activities, it is being looked at now.
	Although we welcomed the regulator's recent probe of the energy supply market, and many of its proposals, we hope Ofgem will make a new year's resolution for 2009 and take time to reflect on how it fell so far behind the curve in 2008. Part of the solution may lie in its powers. We hope the Government will look to ensure that the regulator has all the tools it needs to police the sector effectively. There is an important recommendation in our most recent report in relation to market abuse powers, which we are sympathetic to Ofgem's claim to gain for itself.

Elliot Morley: rose—

Peter Luff: I give way with pleasure to the right hon. Gentleman.

Elliot Morley: I am grateful and add my support for the report. It is a very good job and extremely readable. I was interested in what the hon. Gentleman said about whether Ofgem's powers had kept up with the changes in the energy market. Interestingly, the report mentions that where Ofgem had tried to intervene, the Competition Commission had blocked it. Does he think it is just an issue of Ofgem's powers, or is there a bigger structural problem?

Peter Luff: What the chief executive said to us is that
	"'the Enterprise Act or the Competition Act is quite often a very clumsy tool—using a sledgehammer to crack what may be a big or a small nut'".
	If we could give Ofgem more carefully defined and targeted market abuse powers, it could crack those small nuts, which are often the problems that cause most grievance to our constituents, and understandably so.
	Such considerations as we have been debating need also to be placed within a wider debate on the effectiveness of the overall regulatory regime for energy. A plethora of bodies now exists. They include Consumer Direct, Consumer Focus, the energy ombudsman, the energy companies and Ofgem itself. I find such a framework confusing and I am trying to work my way through it. Members of the Committee find it confusing, and the witnesses who came before us said that they thought it probably would be confusing.
	I know that there have been changes recently that will take time to settle down, but one wonders how our average constituent is supposed to understand the system. After saying that I was referring the direct debit issue to Ofgem, I have been getting quite a lot of letters saying, "But Ofgem has been abolished." No, it is Energywatch that has been abolished. These constant changes are unhelpful, and the structure runs the risk of not properly informing the regulator about issues and problems in the market.
	The events of 2008 within the energy sector and the wider economic context have profound implications for the UK's future energy policy. Ofgem and the Government must now rethink whether the assumptions that they have made are the right ones. Is the market working as effectively as both claim? I do not think it is. Will that market deliver security of supply? It is far from certain that it will. Can that be achieved without sacrificing our carbon reduction ambitions? It must be, and I hope it will be.
	Are the renewable energy targets really achievable? I have yet to hear anyone who thinks they genuinely are achievable. They are good targets to work towards, but can we achieve them? I doubt it very much. A question that worries me a great deal is whether it is right to devolve important social policy questions about poverty to Ofgem and the energy companies. Are those not matters for Government to decide?
	On a specific point, I think smart meters are an important part of the answer to the direct debit question, to carbon dioxide reductions, and to informing consumers about what they are consuming. I note that the Government are in a two-year consultation period for a 10-year roll-out programme for smart meters. Italy did smart meters in three years, so I hope we can move a little more quickly on that subject. We could find mechanisms to enable us to do that. There might be some extra cost, but the benefits would be huge.
	These are many of the questions—not all of them—that the regulator, the Government and the new Energy and Climate Change Committee face, among others, in the coming years. I am sorry to kiss goodbye to these issues. They are vital ones, and the Committee and the Government have some very important questions to face.
	Several hon. Members  rose—

Madam Deputy Speaker: Order. May I advise Members that the Chair of the Business and Enterprise Committee, Mr. Peter Luff, and the Chair of the Health Committee have decided that the time for debate will be divided equally between the two subjects, so the present debate will conclude at about five minutes past eight. I hope, therefore, that hon. Members will be as brief as they can so that more Members can make a contribution.

Alan Whitehead: I join right hon. and hon. Members in paying tribute to the work of the Business and Enterprise Committee and its two recent reports, both for their content and for their quick and timely production. They address the current volatile issues in the market and the longer-term trends on which we should base our energy policy, rather than what is happening daily.
	Although oil peaked at $147 a barrel in July, it has apparently been in free fall ever since, with its current price at $40 to $45 a barrel. That underpins everything else connected with our energy supplies. We must track those curves to make sure that the energy companies charge consumers prices that relate to those and other changes, such as the fact that two nuclear power stations have been out of commission for a considerable time, which raises issues of confidence in our electricity supplies, and the changes in the value of the pound, which have implications for the importation of gas.
	It is important to keep those curves in sight when we discuss energy charges. Notwithstanding the cheaper energy prices that may be with us for a while, it remains fundamentally true that the era of cheap energy is firmly over. It is more than possible that when leading industrial companies come out of recession, the price of oil could rapidly rise very high indeed. We need to make structural changes to our medium and longer-term energy policies and supplies, rather than simply deal with shorter-term changes.
	Those considerations are relevant to the problem of fuel poverty. We are told that, because of the definition of fuel poverty as a percentage of income, 40,000 people go into fuel poverty for every 1 per cent. rise in electricity prices. Logically, 40,000 people come out of fuel poverty, according to that definition, if prices come down. If prices are in a slump, the Government might look as though they are reaching their target for the eradication of fuel poverty over, say, a six-month period, yet six months later they might look as though they are way off beam. The people involved, of course, do not have more money in their pockets to pay for fuel, and neither do they consume different quantities of it; they have simply moved around as a result of forces way beyond their and other people's control. We need to concentrate on structural changes to the relationship of fuel-poor people to the energy that they consume. That is the right way to combat fuel poverty in a high-cost energy economy.
	That will require measures to enable fuel-poor people to control their energy consumption more effectively, and the recent measures to equalise prepayment meters are a pointer in that direction. The issue is not just that people with such meters are more likely to be in fuel poverty, although that is not exclusively the case, or that it is unfair that prepayment meter users are charged excessive premiums, although my right hon. Friend the Member for Leeds, West (John Battle) is absolutely right to be concerned about how those meters have effectively been used as an additional charging device. The issue is also that if consumption is controlled, an additional expense for the fuel-poor is avoided.
	In defence of the direct debit payers, who are the yardstick by which pre-payment meters are measured, I might add that, as the hon. Member for Mid-Worcestershire (Peter Luff) emphasised, just as small imbalances in a roulette wheel system will always benefit the casino, small changes in direct debit payments appear systematically to end up putting money in the energy companies' banks. Even given the churn over time, direct debit consumers are probably systematically lending energy companies money. That does not appear to be right as far as long-term energy supplies are concerned, and I hope that Ofgem will take seriously an investigation into the matter. One of the roles of the successor Committee should be to make sure that the issue is pursued.

David Winnick: Does my hon. Friend agree that there should be maximum pressure, certainly from Parliament and the Government, on the energy companies to reduce their prices substantially, given what is happening with wholesale prices? Does he not agree that the feeling among so many of our constituents about the energy bosses is one of contempt—even more than they feel for bankers? In fact, the general mood is that when people deal with the energy bosses, they are dealing with greedy swine.

Alan Whitehead: I do not entirely go along with everything that my hon. Friend says about energy companies. However, we are moving into a new form of fuel economy and a number of energy companies' assumptions about how the market operates—and for their own benefit—need to be fundamentally reviewed. There were assumptions that worked apparently well in an era of very cheap energy, when people were not particularly concerned about the environmental consequences of their energy consumption and the role of energy companies was—provided that the lights stayed on—to provide as much energy as possible to people at the lowest possible cost. If they made a lot of money, there were no further issues to address. However, now the issues have all fundamentally changed, and the role of energy companies in addressing them and changing things becomes crucial. Energy companies that do not change are guilty of living in a different era of energy supply and making assumptions that are not acceptable in the current debate on energy supply.

Bob Spink: I accept that the hon. Gentleman does not altogether subscribe to what the hon. Member for Walsall, North (Mr. Winnick) said about energy bosses, but I think that he would acknowledge that the energy companies have acted too slowly and not sufficiently to deal with the problems. Does he not think that one of the solutions is to put social tariffs on a statutory basis—standardise them across the companies so that the public can understand them, and make sure that we in the House, the Government and the companies themselves make the public aware of them? Currently, the public are simply not aware that social tariffs are available. Does the hon. Gentleman not think that what I have mentioned might be part of a good solution?

Alan Whitehead: I thank the hon. Gentleman for that suggestion. Putting social tariffs on a statutory basis and making sure that they are not simply a device to shift responsibility for underwriting them to different forms of customers is important. However, I emphasised earlier that our world has changed; I also think that simply saying that we can shift notions about how people pay for electricity is not a sufficient answer to fuel poverty or energy supply problems.
	I mentioned the problems of prepayment meters and those who pay by direct debit. Both those issues could be resolved instantly by the introduction of smart meters. Smart meters give people control of their energy supply and mean that readings can be made regularly, rather than there being estimated bills. Prepayment smart meters could be calibrated regularly and an accurate reading could be made of what is being paid. All that would make a big difference to how the energy is supplied and the consequences.
	I hope that the programme enabled by the Energy Act 2008 to roll out smart meters is substantially truncated. As far as meters are concerned, we are living in a medieval world. There are still what are virtually wind-up meters in many houses, and a lot of the time those who clamber in to read the meters do not do so accurately. A lot of people are living in a world of estimates and possibly of substantial overpayments, whatever their tariff.

Lynne Jones: My hon. Friend mentioned truncating the programme, which is expected to take as long as until 2020 to be implemented. What does he consider a reasonable length of time for such a programme to be implemented nationwide? Does he agree that we need a programme such as the one that operated when there was household switchover from coal gas to natural gas?

Alan Whitehead: Personally, I think it essential that smart meters are rolled out in the shortest time possible if we are to move into the new era of energy supply—particularly if we are to supply as little energy as we can, rather than as much as we can, to each household. Anything we can do to truncate the period as much as possible—perhaps by three to four years—is important. Measures suggesting that at any one stage the six major companies could visit the same street, to compete to put the smart meters in, are probably not the way to go. It is important for us to consider a roll-out area by area.
	The change heralded in the recent pre-Budget report in how we look at energy is also important. There was £300 million for the community energy-saving programme—which, incidentally, is to be rolled out street by street and not as a patchy programme—and an additional £174 million for the Warm Front programme. There was also an increase in the carbon emissions reduction target over the next two years, a £3.7 million commitment. However, the process by which energy companies appear to have to search out the fuel-poor and vulnerable so that their properties can be made more energy-efficient will have to be considered again. Local authorities have a substantial role to play in that. If a further windfall tax on energy companies is being considered, such a levy needs to be placed firmly in the context of energy saving and controlling the use of energy. If we simply take a tax from energy companies that can be wholly recovered by them, we will not make any difference to what is happening to energy supply and we will have failed in terms of the imperatives that now exist as regards the energy market.

Martin Horwood: Does the hon. Gentleman agree that one of the fundamental changes that must one day take place is the breaking of the link between energy companies making greater profits and supplying more of the essential resource? Until that fundamental market link is broken, all these things will have a limited impact.

Alan Whitehead: The hon. Gentleman uncannily anticipates what I am about to say.
	A corollary of this change in how we deal with the energy market and energy supply is the extent to which the regulator has the ability to regulate structural changes in the energy market and ensure that it moves from a market in which energy companies are regulated on charging but not on supply, regardless of how much is supplied, to one where incentives and regulation are directed at the efficient supply of energy and efficient use of energy supply. I am not convinced that Ofgem, in its current incarnation, can perform that role. I remain concerned that its main weapon appears to be switching, yet more than 30 per cent. of people switch to a higher priced tariff in any event. Even if everybody switched, there would not be a lower supply of energy to any particular household as a result.

Paul Truswell: Will my hon. Friend condemn the practice of suppliers who impose a financial penalty on customers who want to switch tariff with them or to move to another supplier? Does not that militate against the ability of consumers, particularly low-income families, to operate the market in the way Ofgem suggests?

Alan Whitehead: My hon. Friend makes an important point. There are a variety of problems with switching, in the extent to which evidence suggests that a number of impediments are put in the path of switching and the extent to which people have usable information about what switching means for their future tariffs. However, that has to sit with the overall point that switching is not the answer in its own right, by any stretch of the imagination. Although it may be an important element of how the current market operates, it is ultimately a zero sum game as regards the imperative of reducing the total amount of energy going roundthe system.
	One small structural change that we might pursue is to consider the methods whereby we deliver insulation and renewable, sustainable devices into the domestic environment and into small and medium-sized enterprises. The Treasury rules about what one can and cannot lease could be changed very slightly to make it possible to align the leasing arrangements in SMEs or the ability of energy companies to supply renewable products and insulation to homes. That would enable devices to be leased rather than purchased and therefore enable those leases to be paid for by the savings that people make in the energy supply that the devices then supply to their homes and buildings. At the moment, the Treasury rules say, "If you can wheel it out of the door you can lease it; if you can't, you can't." Even if it can be unbolted from the wall and moved away, it cannot be leased. A change in leasing arrangements, like other aspects we have discussed—smart meters, switching and other devices that do not look fundamentally significant in their own right—could make a substantial difference to how people manage their energy supplies and how energy companies deliver those devices and services to people. Over the next decade, we should try to achieve the aim of a low-carbon energy economy that nevertheless supplies energy at an affordable price.

Steve Webb: In the limited time that we have available, I want to focus on fuel poverty and the role of Ofgem. I echo the comments made by the hon. Member for Mid-Worcestershire (Peter Luff); given the importance of the topic that we are debating, it is nonsense to have less than a couple of hours to do so. There clearly should have been some sort of injury time.
	The official figures tell us that there are 3.5 million households in fuel poverty, that earlier this year there was an estimate of more than 4 million and that the latest estimate by the Government's own Fuel Poverty Advisory Group puts the number at between 5 million and 5.5 million households. That is astonishing. Will the Minister discuss with his officials why we have official statistics on this subject that are two years out of date? I understand that the reason is partly that the English house conditions survey has to be done and processed, individual consumption has to be applied to that and the numbers crunched. However, we could surely have a broad estimate of what has happened since the survey was done. We know what has happened to the prices of the main suppliers and to benefit levels, and it would not be too difficult to get an up-to-date figure. That is important, because the changes that go on in the market have a different impact on different people. We are almost trying to make policy with a blindfold on. If we are using the fuel poverty statistics to inform policy, we should not be using two-year old statistics. If some estimate were made of what has happened since then, it could inform us as to whether, for example, people using the gas main, pensioners or people living in particular areas had been prejudiced.

Mike O'Brien: The hon. Gentleman will understand in the light of current controversies why I might hesitate to rush out statistics without their going through the full and proper process.

Steve Webb: I think that we will let the Minister off in this case. All I can say is that I strongly suspect that he would not be rushing out bad news early. To be serious, I point out that informed policy making needs up-to-date data, and that is a problem in this area.
	I recently wrote to the big six energy companies and asked them for an up-to-date and comprehensive account of their social tariff structures. They all wrote back quickly and gave me a full account, which I will publish shortly. One or two interesting things came out of that, which I was not aware of and want to raise with the Minister. First, the Government have legislated to allow the companies to know which of their customers receive pension credit. The companies have told us in the past that one of the problems that they face is finding their poor customers—knowing who they are. The Government are now going to enable them to know who those customers are, at least as far as pension credit is concerned. The companies tell me that they are concerned about the assumption that once they know, they will have to do something about it. There are millions of people on pension credit, but only 600,000 people on social tariffs, and the Minister will know that there is a big difference between the two groups. What can he tell us about his expectations of the energy companies now that taxpayers' money is going to be spent on telling them which of their customers are on pension credit? Does he expect them to do anything about it? It would be interesting to know what the Government's position is on that.
	Secondly, I found out about how breathtakingly complex social tariffs are; perhaps that was already well known to everybody else. I discovered that depending on which company someone is with, their eligibility for a social tariff might depend on how many bedrooms they have, whether they are over 60 or over 80, which benefit they are on or how long they have been with the company, so that they may have to switch to a company and stay with it for a year before they are eligible. I find that most consumers do not have a clue; in fact, many do not even know that their company has anything called a social tariff. I recently contacted a power company because I had met a very elderly lady who was struggling financially; I said, "Can you help her?", and it said, "Now we know that she is very elderly and struggling, we will switch her on to such and such a tariff, and that will save her a lot of money." She did not know, and if I had not contacted the company it would never have happened. That is laughably—or it would be laughable if it were not so serious—hit and miss.
	That raises a serious question about mandating national standards on social tariffs. Given that the fuel-poor are the least likely to switch anyway, we cannot rely on them to shop around between all these different companies, with all these totally confusing social tariffs, all of which have different and changing rules, names and eligibility criteria.

Michael Weir: Does the hon. Gentleman not agree that there is actually a slightly worse problem, because all the companies' tariffs are different? The tariff that someone is on might not be the best one, but that does not necessarily mean that they will switch to another company with a better tariff just because they are found to be fuel poor.

Steve Webb: The hon. Gentleman is right. Not only might someone be better off with another company or on a different social tariff; they might not even be on the best tariff of the company that they are with. Fuel poverty is important. I do not know when the figures for excess winter deaths will next be published—the Minister might be able to tell us—but they are truly shocking. One excess winter death is truly shocking, especially when we think of the cold countries that do not have that problem. One can only fear that this winter will be a bad winter. The fact that consumers are not accessing the best prices for which they could qualify is simply unacceptable.
	There is a danger of comparing the companies in an unfair way. One company will tell the House that it offers more social tariffs than any other by a long chalk. That company may have closed its social tariffs temporarily, however, because it is waiting for the others to catch up. However, it can turn out that when the company applies its social tariff, it charges more than some other companies charge on their normal tariffs. The consumer is baffled by all this. Again, that is an argument for regularising the situation and giving people an entitlement, rather than just hoping that everything will work out.
	The role of Ofgem is important. I woke up this morning to the sound of Alistair Buchanan—a bad move that has coloured the rest of my day. I have no idea whether he timed his announcement because we are debating Ofgem today—I am not a cynic—but he was boasting about the hundreds of millions of pounds that Ofgem had saved consumers. I did a bit of mental arithmetic over my cornflakes and worked out that if he has saved, to take some round numbers, £200 million in 20 million households, that works out at £10 a year or 20p a week on average. His proud boast this morning, therefore, was of having achieved an average gain for households of perhaps 10 or 15p a week—I accept that that is not averaged out over everybody, but the figures are not that great if we put them in context.
	Alistair Buchanan told Nicky Campbell that he would stamp his regulatory hobnailed boots all over the companies if they did not play ball, but what has he been doing all this time, while the companies have been leaving vulnerable customers in fuel poverty, failing to alert people to the social tariffs and overcharging on direct debits? In many cases the companies' behaviour has been disgraceful, and the regulator has been pathetic. He wants us to think that he is a tiger, but he is a pussycat. Will the Minister tell us what he thinks of Ofgem's performance? I hope that he will be candid and tell us whether he thinks the chief executive of Ofgem should still be in a job at Christmas.

Lynne Jones: Will the hon. Gentleman give way?

Steve Webb: I will, although I will also happily give way to the Minister if he wants to answer that one.

Lynne Jones: Does the hon. Gentleman agree that it is disgraceful that Ofgem is requiring the energy companies to release accounts on the separate wholesale and retail markets only now, after the most recent probe? Surely it should have done that years ago.

Steve Webb: Absolutely. As the Chairman of the Select Committee said, there is a litany of things on which the Committee has had to prompt Ofgem to do its job properly. That is totally unacceptable.
	Ofgem identified three ways in which the companies were exploiting their market dominance. The first is through pre-payment meter premiums. I take the point that there has been some progress, but we have still not eliminated excessive penalties on prepayment meters. I also take the Chairman of the Committee's point that there is no straight corollary between prepayment meter usage and fuel poverty. We need to ensure that the fuel poor in particular are not being overcharged for their energy. The second way relates to people who are off the gas main and who cannot access dual-fuel benefits. Some action there is necessary; indeed, it is good to see some.
	The third way in which the companies exploiting their market dominance, on which I have seen no evidence of progress, is through local monopolies. It has been put to me that companies such as—I do not mean to single this company out specifically—London Electricity, which became EDF, make all their profits from their legacy customers; that is, from inertia and from the people who have not swapped to an out-of-area supplier. That is a classic example of a market not working. Where a company has a huge base of inherited customers, many of whom would be better off switching, but who have stuck it out because they do not know how to switch, cannot be bothered to switch or whatever, that company can cream off millions. Ofgem says that there is a problem, but does not seem to be changing much. We need to give a kick—with a hobnailed boot, I suppose—up the backside of Ofgem, so that it really gets serious with the companies.
	The House would not expect me to reserve all my criticisms for Ofgem, and the Minister would be disappointed if I did not direct some at the Government, so I will balance things up. Ofgem and the Government are like Tweedledum and Tweedledee, because they both say exactly the same thing: "If you don't behave, we'll get tough." I have noticed that when I threaten my children with discipline but then fail to deliver it, they continue to misbehave. If the Minister thinks of himself as a slightly grumpy parent, I hope that he will realise that when he threatens discipline but does not deliver it, the children will go on misbehaving. My children have learnt—such behaviour is called learnt behaviour—and I am afraid that the energy companies have also continued to behave as they do. They have been told that they are in the last-chance saloon, but they have been ordering extra rounds over and over again.
	Somebody has to draw a line. Somebody—I do not much care whether it is the Government, Ofgem or both—has to tell the energy companies. The fuel-poor and our constituents more broadly are fed up with people threatening to get tough. That has gone on long enough. The fuel companies have been given enough rope to hang themselves and that is what they have done. Now someone has to pull it a bit tighter. Of course they have a right to trade and make a profit. Indeed, we need them to make a profit to invest. I understand all those things. However, the energy companies are not making a profit through economic efficiency in a dynamic market; they are exploiting a quasi-monopoly, and the most vulnerable people in our society are losing out as a result. That has gone on for too long; it has to stop.

Nick Ainger: I have been involved in the oil industry since 1973, first working in it and from 1992 representing Milford Haven, the largest UK oil port. When I saw crude oil prices starting to rise in the middle of 2007, peaking at $147 a barrel in July 2008, I scratched my bald head and thought, "What on earth is going on?" Since 1973, I have seen middle east crises, the straits of Hormuz closed, the Iran-Iraq war, problems in Nigeria and hurricanes in the gulf of Mexico that have taken out significant proportions of the American refining industry. However, I have never seen the price of crude oil double, as it did between the summer of 2007 and the summer of 2008, or fall to around $40 a barrel, as it then did in the space of six months.
	The effect of that has been catastrophic. We have been talking about fuel poverty and the fact that since around the beginning of 2007, 2 million more people are likely to be in fuel poverty than before. We have seen riots around the world and the beginning of a huge global downturn, the like of which the Chancellor of the Exchequer believes we have not seen for 60 years. We have seen a huge hike in energy prices, coupled with the credit crunch—I want to link the two, because I believe that they are absolutely interconnected—and now we are facing a severe downturn.
	When I undertook some research in February and March on why the price of crude oil was doing what it was doing, I discovered that the US Congress was conducting exactly the same sort of investigation and taking evidence, so I have used quite a bit of that research. It appears that approximately five years ago, commodity index funds started to grow quite substantially. Between 2003 and July 2008, trade in commodity index funds in a range of commodities, not just oil, grew from $13 billion to $317 billion. Taking into account not just trading on the exchanges, but all the over-the-counter trading taking place, the Bank for International Settlements believes that there is some $9 trillion involved in commodity futures and speculation.
	In the summer of 2007, when the credit crunch began, investors abandoned stocks and shares—certainly banks' stocks and shares—and sought an investment market that appeared to them to be safe and profitable. They alighted on commodity index funds for understandable reasons: these were pension funds, university endowments and the funds of insurance companies. The investors needed a safe income, and, believing that commodity index funds would provide it, they piled into them. As a result, we saw a huge growth in the market for commodity index funds. I am certain that the link exists—that the consequence of that huge influx of funds was the remarkable speculative spike that has caused so much damage.
	It is interesting to learn the views of people who would be expected to know something about such matters. In April 2008, in a report, Citigroup spoke of
	"A Tidal Wave of Fund Flow—Despite the economic gloom many commodity prices hit new highs in recent weeks, driven largely by investment inflows."
	George Soros, who certainly knows all about these matters, said in April 2008:
	"You have a generalized commodity bubble due to commodities having become an asset class that institutions use to an increasing extent."
	Goldman Sachs, one of the biggest players in the commodity index funds market, said:
	"Without question increased fund flow into commodities has boosted prices."
	An even more famous organisation, Lehman Brothers, said:
	"We have argued recently that some of the price buoyancy during Q1 reflected financial flows and investments in oil and other commodities... Our study indicated that for every $100 million in new inflows, WTI"
	—this was a reference to West Texas Intermediate oil—
	"prices increase by 1.6 per cent... Our conclusion for this study is that we are seeing the classic ingredients of an asset bubble."
	The financiers were saying "We have now spotted what is happening. We are in an asset bubble."
	At the same time, on the other side of the coin, the oil industry—certainly the Saudi energy Minister, and many other energy Ministers in OPEC—were saying "Don't blame us, guv. We do not envisage a fundamental problem between supply and demand." In fact, Members may recall that Saudi Arabia was prepared to increase its output by 500,000 barrels a day back in May and June. There was not really a problem of tight supply. I have concluded that while China and India were certainly playing a role in increasing demand, that did not justify the level of increase that we saw between the summer of 2007 and the summer of 2008.
	Another factor that had an impact, according to pundits, was the fluctuation in exchange rates—the weakness of the dollar in relation to the euro, and so on. Again, that will have been a factor, but it does not account for the huge spike that we saw. That is true not only of oil but of many other commodities. Once the impact of high energy prices had had its effect on the global economy and we started to see the beginning of the downturn, the fundamentals kicked in, and we saw the collapse of not only crude oil prices but metal prices, and even food prices, as people withdrew from commodity index funds.
	A number of Members have said that we will come out of the present situation, and that the days of cheap oil will never return. What we must prevent is a recurrence of what we saw in 2008. I think that the only way in which to do that is to ensure proper regulation of vital markets, not just in oil—important though that is—but in metal and other commodities. We need full transparency, not only in relation to commodities traded on the exchanges but in all the over-the-counter deals which are, in effect, unregulated and have a huge impact on the prices of commodities. We also need to return to the situation that existed probably 10 years ago, and had certainly existed since the 1930s, in which position limits were placed on those in the market.
	Ten years ago, producers and suppliers of oil were the main players in the exchanges. Perhaps 60 per cent. of trading was carried out by people who had a direct impact; the other 40 per cent. was carried out by those who provided liquidity. Their trading involved speculation, but it was necessary to provide the opportunity to hedge prices on those exchanges. Now the ratio has reversed. The majority of traders do not want to buy a pork belly, a bushel of grain or a barrel of oil. They are there to make money, from their pension funds, their university endowments or their insurance companies. I believe that until we return that ratio to where it was, the risk will remain that we will face yet another speculative spike in the future, and the only way in which to deal with that is through global regulation.
	I am very pleased that the Prime Minister is considering all those issues. It is clear that not just the financial sector but the commodity markets need global regulation. I understand that the United States Congress is beginning to consider the matter seriously, and we need to persuade our regulator—the Financial Services Authority, which looks after the ISAs futures market—that it should take it seriously as well. The Treasury Committee, of which I am a member, is looking at the issue, although we currently have other problems on our hands involving the banking crisis. I should like to know what my hon. and learned Friend the Minister thinks about the need for greater regulation of the commodity markets to prevent a repeat of what happened this year.
	My second point relates to rural energy customers. I wrote to my hon. and learned Friend enclosing two letters forwarded to me by constituents. Both were customers of Flogas, from which they had bought liquefied petroleum gas. One of the letters, dated 1 October 2008, began
	"Dear Customer
	Price fix for the winter".
	The first constituent was offered a guarantee that the price of his LPG would be increased by 3p per litre, but that it would be fixed until 31 March 2009. Flogas wrote a similar letter to his neighbour on 2 October offering to increase his tariff by not 3p but 5p per litre.
	That suggests two things to me. First, on 1 October we had experienced nearly four months—certainly three months—of dramatic falls in the price of oil. LPG is tied directly to the price of oil: it is almost like a by-product of the refining process. Yet the company was telling its customers that despite those three or four months of dramatic falls, its price would increase and would be fixed until 31 March next year. I think that that is outrageous. It is clear that no proper market is operating in the LPG sector in rural areas. Furthermore, those two neighbours knew each other and were able to determine that they were being charged different tariffs even though they lived 100 yd apart.
	My hon. and learned Friend the Minister gave me an excellent response on what is being done to try to increase competition, not only in the LPG market but in the heating oil market. Heating oil is actually kerosene; it is jet fuel, in effect. It is used to heat a very large number of rural homes that cannot get a connection to the gas main. I am certain that British Airways and other airlines have seen dramatic reductions in the price of jet fuel—that is, kerosene—recently, but I am also pretty certain that domestic users of kerosene have seen nowhere near that level of reduction.
	This comes back to the suppliers. I am not talking about the relatively small businesses that deliver the kerosene. I mean the larger suppliers—the energy companies and the oil companies. I do not believe that there is genuine competition in relation to the delivery of heating oil and LPG. Many of the distribution companies that I have spoken to tell me that the price to the consumer for both those products goes up immediately when the price of crude goes up, but that there is an awfully long time lag before any reductions are passed on. That should not be the case. I can understand it happening in the gas and electricity supply markets, but not in the LPG and heating oil markets. The price should fall as quickly as it rises, if it is keeping pace with the price of crude oil. Ofgem—or perhaps the Department itself—needs to look into what can be done to achieve proper competition in the supply of heating oil and LPG in rural areas.

Peter Luff: The hon. Gentleman is making an important point. Some 5 million households are not on the gas network, and this is an important issue for many of our constituents. The trouble is that, in this respect, Ofgem does not have powers. I still think that the Government are wrong to imagine that the Office of Fair Trading can handle the matter, and I believe that Ofgem needs more powers in this regard.

Nick Ainger: I totally agree. There is blatant abuse going on, and there is no genuine competition in either of those so-called markets. Members who represent rural constituencies have heard about real problems that have been encountered. For example, many elderly people retire or move to a rural area, perhaps to a home that is not particularly fuel efficient—although we can help them with that—only to find that their outgoings are being hammered. The price can depend on the time of year at which they fill their tank up, which is also an abuse of the market. An 80-year-old man came to my constituency surgery on Saturday and told me that he was spending 20 per cent. of his income on heating oil, which I found quite incredible. There is a real issue that needs to be addressed.
	I support other Members' comments about the need for far more Government action to tackle fuel poverty. The main reason for 2.5 million people being classified as in fuel poverty over the past two years is undoubtedly the huge hike in the unit cost of energy, and the Government are absolutely right to make significant investments to enable people to have more efficient systems, to start to tackle the problem of prepayment meters, and to make investments so that homes can be much warmer. In the short term, however, we will definitely fail to reach our 2010 energy target unless we can get the energy companies to pass on the substantial reductions in the wholesale cost of energy. I look forward to hearing my hon. and learned Friend's comments on this later.

Michael Weir: The evidence session that the Committee heard when we were preparing this report was among the most interesting that I have been involved in, covering a huge number of issues, from the markets and the impact on industry to fuel poverty. The Chairman, the hon. Member for Mid-Worcestershire (Peter Luff), gave the House a very good resumé of those issues, so I will not dwell on them further. I agree with everything that he said, apart from his enthusiasm for nuclear power, which I do not share. In the time available to me, I would like to comment on a few of the recommendations in the report.
	Clearly, the most pressing issues for households up and down the country are the price of energy and fuel poverty. The complex nature of this problem is reflected in the number of recommendations on those subjects. Some of those recommendations have already produced action, and I am now going to break the habit of a lifetime by saying something almost nice about Ofgem. Its action was prompted by the Committee's inquiry, and I share the Chairman's reservations about its needing to be prompted in that way. None the less, the report has produced some welcome changes, even if they are somewhat overdue.
	However, I would urge the Government, Ofgem and, indeed, the companies to go much further, particularly in relation to prepayment meters. I agree with what many others have said about the difficulties that they present. Under the current proposals, there would still be an opportunity for companies to charge more for such meters, due to what they call opportunity costs—namely, the fact that the meters cost more to service. There might be something in that, but I do not believe that we should accept that argument in respect of people who are on such meters because they are fuel poor. I deliberately make that point because not everybody who is on a prepayment meter is actually fuel poor. We should bear that in mind.
	For the fuel poor, prepayment meters are an example of people being penalised for paying in advance in cash. They are often used when people are in arrears and they bring with them the serious worry—for me, at least—that people will simply self-disconnect when they cannot afford the tokens to feed the meter. We collected data on disconnections relating to other methods of payment to the energy companies, but there are no reliable data on the number of people who simply self-disconnect by not feeding their meter. That can present as many problems as there are for people who are disconnected for other reasons, and they might be disconnected for quite long periods of time because they are unable to afford to feed their meter. That risk needs to be tackled, because if we do not know that it is happening, we cannot take action to help people in that position.

Steve Webb: That is absolutely right. I have asked the energy companies to look into this, and they have told me that they do not know how to do it. The answer, however, is smart meters, and the sooner we can get on with installing them, the sooner we will know what people are consuming.

Michael Weir: Indeed, and smart meters will also need to be interchangeable, so that everyone will know what the meter does and so that it can be easily looked at. It might also be possible to track instances of meters not being fed.
	The report also tackles the difficult subject of social tariffs. I would particularly like to draw the House's attention to recommendation 38, which states in part:
	"We do not accept the view that a mandatory and comprehensible definition of what constitutes a social tariff would create a 'race to the bottom' for all suppliers—rather, it would provide a minimum level above which they can compete, not only on tariffs, but also on other schemes to assist the fuel-poor."
	I strongly endorse that recommendation, and I cannot for the life of me understand why the Government and the companies are so against the idea of a mandatory, statutory minimum tariff. The current tariffs are contradictory and confusing and it is difficult to determine what is in fact the best social tariff.
	Nothing sums up the situation so eloquently as the disputes among the energy companies as to which offers the best social tariff. British Gas claims that it does, as it has more customers on the tariff, but I would like to quote from a briefing from Scottish and Southern Energy that I received in the past few days. It says:
	"The Essentials Tariff (the BG social tariff used in their standard analysis) is set at their direct debit level. This is particularly significant as SSE's standard direct debit tariff has actually been cheaper than the British Gas so-called 'social' tariff. Therefore, British Gas Essentials Tariff is not actually helping fuel poverty; it is just helping some of their poorer customers get a slightly better deal than some of their other customers—all within the generally higher British Gas pricing policy. The SSE approach, on the other hand, discounts heavily from our, already low, baseline."
	Make of that what you will, Madam Deputy Speaker, but what is the consumer supposed to make of it? How is the consumer able to determine what is actually the best tariff? Even at this late stage, I urge the Minister to look again at the issue of mandatory social tariffs. Let us have a clear, transparent system so that people know what they are getting.
	That brings me on to question of switching. It has already been noted that a lot of people switch suppliers, but end up worse off—further evidence of the lack of clarity about pricing. I was very pleased yesterday when Scottish Power announced an improved tariff for vulnerable customers aged over 60 who receive benefits, but I make the point again that that does nothing for many vulnerable customers who are not over 60. Our Committee made a clear recommendation for more to be done to target the fuel poor who are not pensioners, particularly the disabled. We returned to that issue in our supplementary report, which was issued the other day and in which we said:
	"We also reiterate our frequent recommendation"—
	it is not just us, as the predecessor Committee also made the same point—
	"that much more attention must be paid to groups in fuel poverty other than pensioners, particularly disabled people under 60",
	because they suffer just as much as many pensioners. Something must be done to tackle that problem.
	To mention a point that the hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) touched on, I was particularly pleased with the recommendation on off-network consumers—an issue that I have pursued for some time, including through the hearings that are mentioned in the report. It became clear that neither of the consumer bodies—Energywatch previously or Ofgem now—had any remit whatever in that respect. These people had simply fallen off the radar of fuel poverty.
	Many of my constituents in rural Angus do not have access to the gas network—and, with the best will in the world, they never will. There are good renewable energy schemes that can help, but at the moment many of my constituents use LPG or home fuel oil. I am pleased that, following our recommendation, Consumer Focus has said that it will take this issue into account, which is progress. I nevertheless agree with both the hon. Members for Carmarthen, West and South Pembrokeshire and for Mid-Worcestershire that Ofgem needs to be involved as well. The point that the hon. Member for Carmarthen, West and South Pembrokeshire made about LPG also applies to coal and fuel oil prices.
	Let me ask the Minister to give consideration to this issue: we always pay the winter fuel allowance in the winter, but it may well be cheaper for someone to fill up a tank or buy coal in the summer months. I would like the Minister to reflect on whether, in certain circumstances, the winter fuel allowance could be paid to some people earlier in the year to allow them to take advantage of the lower prices. I appreciate the difficulties that that may cause, but it is worth considering, as it would help some people. There is no magic bullet to deal with fuel poverty and, as the report states, there are many other things to be done to combat it—home insulation, for example. Many homes need to be retro-fitted with good insulation to save energy.
	The Scottish Government have launched an ambitious programme to help tackle fuel poverty and, unlike with Warm Front in England, they have maintained spend on fuel poverty programmes through the year. They have allocated an additional £10 million for the central heating programme, which is about installing such heating in vulnerable homes, and for giving more help to fuel-poor households. A record number of central heating installations were completed last year. The Scottish Government have also proposed increased help beyond basic insulation, which is being provided UK-wide, to families on income support with children under five or with disabled children under 16, as well as to pensioners. The Minister should look into extending those measures to other vulnerable groups in the rest of the UK. Those existing programmes reveal the wide range of issues that need to be addressed in tackling fuel poverty. With all that going on, I have to tell the Minister that it is a scandal for the UK Government at this time to slash the budget of the Scottish Government by £1 billion, which is bound to impact on many necessary programmes.
	I promised that I would not speak for much more than 10 minutes, so I will start to conclude. The report is not only about fuel poverty and energy prices, but about the security of our future energy supply. The Select Committee Chairman made many of the points that I would make so I will not dwell on the issue, other than to say that when we think about the big six energy companies we have to take into account the fact that we are asking them to do two contradictory things—to reduce prices, but at the same time also to make the huge investments needed for future energy generation of whatever type. The Government need to look further into how to deal with such contradictory priorities. A bankrupt company cannot invest in generation and we need to consider whether the current market provides the best means of meeting those priorities.
	The profits of the energy companies were mentioned, so I should like to return to a point I raised in an intervention. Because four of the big six are multinational companies, it is difficult to ascertain how much profit they are making from generation, how much profit comes from sales and how much of it is actually made in the UK. In some ways, British Gas and Scottish Power and Southern are disadvantaged in that we can see how much profit comes from the UK, but the Government need to look further into the matter, perhaps in tandem with the European Union. We need more clarity and we need real thought about how to get the energy companies to meet the two contradictory objectives—to invest in generation and to deal with climate change as well as with prices, particularly for vulnerable customers.

Elliot Morley: In the remaining time available, I shall ask a couple of questions, as some points in the report will have to be followed up and progress made. Having heard the issues raised in the debate about Ofgem, does the Minister believe that its terms of reference need to be revised in the light of market changes and current pressures? The electricity and gas companies, for example, have asked for an enormous increase in contributions to monthly payments. Is that justified and is Ofgem adequate to protect people from those demands? Although there is no doubt that the deregulation of the market brought about a fall in prices for consumers, is the Minister satisfied that the market is working adequately now—and not just for domestic consumers, who are very important, but for business consumers? I represent a constituency in Scunthorpe that has much energy-intensive industry, so I am concerned to ensure that there is fair competition in respect of energy prices for companies in this country as compared with prices in the rest of Europe.
	My final point is about carbon capture and storage, which was mentioned earlier. Yorkshire Forward presented a proposal for a carbon capture pipeline in the south Humber bank, leading to the gas fields and allowing energy-intensive industry to connect to them. I declare an interest here, because the installation of a carbon capture blast furnace in Scunthorpe is under active consideration and having that sort of infrastructure would make the project all the easier. I am very keen to see such new technology implemented in our own country. I believe that this represents one way forward for the low-carbon economy. I understand that, at the European Council, the EU agreed to make a sum of about €6 billion or €7 billion available. Given the existence of that European funding, is the Minister open to thinking again about a bid from Yorkshire Forward, perhaps in partnership with some of the energy-intensive companies in that area, as a means of providing such important infrastructure investment?

Charles Hendry: I begin by congratulating my hon. Friend the Member for Mid-Worcestershire (Peter Luff) and his Select Committee on its work in preparing these reports. As the Select Committee starts to lose its responsibility for looking into energy matters, these reports will provide a lasting and important testament to the diligence and expertise of its members in studying the energy challenges that our country faces.
	The reports have given rise to a thoughtful and constructive debate and I hope that you, Madam Deputy Speaker, will make strenuous representations to the business managers of the House about the fact that so many outstandingly able right hon. and hon. Members who have tremendous expertise have been denied the opportunity to speak in the debate because of the lack of time.
	I want to focus on the issues of fuel poverty and this country's future energy supply. Today has been a bad day for consumers. I think that they had hoped for relief from the Ofgem announcement, but they have not received it. That is why this morning's announcement has received a poor response from organisations such as Age Concern, Help the Aged and the National Housing Federation.
	Of course we welcome the progress that has been made on prepayment meters and in relation to those who are not on the gas grid, but more is clearly needed. Now that it has been recognised that people in those categories had a bad deal in the past, I hope that the Minister will say whether he will seek compensation for the way in which they lost their income.
	There is little here for consumers more generally. We know now that there are probably 5.5 million households in fuel poverty, and every 10 per cent. increase in fuel prices pushes another 400,000 people into fuel poverty. We know that here in the UK energy prices are rising twice as fast as the EU average. We know as well that many people face a raw deal from how the direct debits operate. We also know that this is about not only those who are defined as being fuel-poor—millions of households across the country will struggle to pay their bills this winter. Worst of all, knowing that 25,000 people died last winter because of cold-related illnesses, it is likely that that figure will be higher this year.
	We must recognise that more should have been done earlier. In October, we were told by the Secretary of State that he would give the energy companies four weeks to take urgent action. In November, he said that he would give them another four weeks. Today, he is saying that he will think about consulting on having a review to discuss what more should be done if they do not do something now.
	The time for action has passed and we should have seen more. We should now be seeing the Government taking action to make excessive profiteering on prepayment meters illegal. There should be legislation to provide social tariffs for vulnerable households. There should be a requirement that the companies from which people get their energy should say on their bills what would be the cheapest tariff. There should be an extension of the Post Office card account to enable those who do not have bank accounts to get the best tariffs available.
	We think that the time has come for the Government to ask the Competition Commission to look into how the companies operate. So, while the Government have said that affordability is a priority, it must be a matter of great concern that we have not seen that achieved.
	The report also considers how Warm Front works. A couple of weeks ago, I raised that matter with the Prime Minister at Question Time. I received a letter from him today and he says:
	"In addition to the £74 million of new money announced on 11 September, a further £100 million of new funding has been made available to Warm Front through the Pre Budget Report... The additional £100 million brings the total spent on Warm Front to over £950 million for the 3 year period to March 2011."
	That is a very partial reply, because he does not say that new money is simply reinstating some of the funds that have been taken out. For those three years, we are still left with a Warm Front budget of £100 million less than originally intended for that period. We need to know whether the Prime Minister is aware of the fact that the budget has been cut, or has he deliberately chosen to hide that? The bald fact is that the Warm Front budget has been cut, but because some of the cut has been restored, he seeks to portray that as an increase.
	Moving on to security of supply, which is so crucial to the debate because of its impact on future energy prices, there is recognition across the House that we need investment in new capacity. Paragraph 17 of the Select Committee's first report of the 2008-09 Session puts it well:
	"The situation is now very serious and we believe that a simple trust in the market's ability to deliver without any intervention will see us facing an 'energy crunch' in the medium term. The social and economic consequences of such a 'crunch' would be disastrous."
	Although I recognise that the Minister is relatively new to his brief, I am afraid that he is showing complacency in how that is being addressed. On the "Today" programme a few weeks ago, he said that the lights would be burning even more brightly in 2015 because there would be 37 per cent. more generating capacity on stream by then. He must be the only person in the country who thinks that is true.
	The Minister took the figures from the national grid's seven-year statement, but he knows that they do not take account of planning consents, financing or the cost of commodities, which will determine whether some projects will be built. Crucially, they do not take account of the facilities, particularly in coal and nuclear, which will come off stream, or indeed the variability of wind power: 8 GW of that figure will come from onshore and offshore wind, but he treats wind power as providing the same reliability of supply as would come from gas.
	We also need to recognise that this situation is getting worse. The return on equity required by companies, according to Alistair Buchanan, will be 15 per cent. or more, rather than 10 per cent., which it has been. He says as well that there will be significant refinancing needs across the industry.
	If we need any more warning, we should heed the words of Wulf Bernotat, chief executive of E.ON, who, writing about Britain in  The Sunday Times, said:
	"You have old nuclear plants, old coal, expensive gas, a need to invest in renewables to reach unrealistic targets, and a slow"
	planning
	"process. Doesn't that sound like a problem to you? The situation in the UK is more difficult than a number of other countries in Europe, without people fully realising it."
	We have to be realistic because many of the things that we are looking to are simply not likely to happen. We have a problem here with people wanting to invest in coal: because of the Government's lacklustre approach to carbon capture and storage, they are questioning whether they can make those investments. We are seeing issues even in gas, with RWE in Pembroke saying that it needs an urgent decision on the 2 GW plant for it to go ahead. If that does not happen in the next few months, the financing of it may change.
	Day by day, people in the renewables sector, and particularly those in offshore wind, are saying that they need more funding if their schemes are to come on stream. Centrica has put one of its plants on hold, Shell is pulling out of London Array, and Eclipse and AMEC's wind business have been taken over. RWE says that it needs more support. Projects that looked to be developed in round 2 are struggling, let alone those needed in round 3. They are all saying that the moves towards banded renewables obligation certificates, which we have supported, do not give them enough support.
	The UK has 11,000 miles of coastline and should be a natural place to lead the world in marine renewables sector technologies, but the marine renewables deployment fund cannot be accessed. As Ministers have said, that is because they are not at the deployment stage. Well, the rules should be changed and that funding should be got through to the companies, the brilliant schemes and the brilliant academics so that Britain can lead the world in the sector, rather than seeing that lead heading off towards Portugal and elsewhere.
	I come finally to the issues of gas storage and the role that it plays. The Minister has again shown disturbing complacency and when he gave evidence to the Select Committee, his own hon. Friends said that he did not seem to recognise what was happening. They pointed out the fact that we have moved from being an energy exporter to being an energy importer, so the need for gas storage is greater than ever.
	We have about 4 billion cu m of gas storage and National Grid suggests that we might have 6 billion cu m by 2013. The Minister thinks that we might have 18 billion cu m by 2015. Nobody thinks that that, realistically, will happen because we are finding that projects on the list—the Minister has referred to them—are dropping off it.
	Yesterday, National Grid issued a 10-year statement based on the report that the Minister is relying on, but that report says that 2.5 billion cu m of storage capacity will not proceed as planned, 0.7 billion cu m has been rejected in planning in relation to the Saltfleetby application, 1 billion cu m at Portland has been put on hold because of the investment climate, and a proposal for a further 1 billion cu m has been rejected by the Secretary of State, although it is still showing in the figures as something that might happen.
	We face formidable energy challenges and that will be the key issue of the winter for people who cannot pay their bills because they simply cannot afford the prices out there. They have been looking urgently for support and they deserve support because these problems are not of their own making, but the Government have delayed. As a result, people face a more challenging time this winter than was necessary.
	As the Select Committee report points out, damage has been caused not just to those short-term issues, but to the long-term energy security needs of this country, because the Government have not put in place the steps to secure the necessary investment.

Mike O'Brien: I join the general congratulation of the Select Committee on its report. The report that it published over the summer was a professional and impressive piece of work, and I said so when I met the Committee. The latest report on future challenges involves a little bit of crystal-ball gazing, and when gazing into the future it seems to see things a little darkly, but a lot of challenges need to be met, and the Government are determined to meet them.
	I can hardly think of any justification for the claim of Government complacency made by the hon. Member for Wealden (Charles Hendry). We have just enacted the biggest legislative programme on energy that has ever been carried through by this Parliament. The Energy Act 2008, the Climate Change Act 2008 and the Planning Act 2008, are a major set of policy initiatives that the Government have undertaken to meet some of the key challenges. The formation of a Department of Energy and Climate Change shows that the Government treat seriously the key challenges of energy sustainability, security of supply and the ensuring of affordability. The Government aim to cut emissions, hit our climate change targets, defend consumers and ensure diversity of supply of energy.
	I welcome the breadth of the debate. A number of serious points were made by hon. Members. My hon. Friend the Member for Southampton, Test (Dr. Whitehead) gave an excellent analysis of fuel poverty issues and my hon. Friend the Member for Carmarthen, West and South Pembrokeshire (Nick Ainger), with his knowledge of the oil industry, made interesting points about the commodity market. My right hon. Friend the Member for Scunthorpe (Mr. Morley), with his knowledge of intensive energy users, made some important points, as have other Members, and I hope to deal with some of them.
	We need to deal with the key issue of affordability. Consumers must be able to get the energy they need at the lowest sustainable prices possible. Beyond that, they need to be confident that the prices that they pay are fair, and they are not at the moment. Healthy competition and fairness should be the hallmark of our independently regulated energy markets, and if there is any suggestion that consumers are being ripped off, we should not hesitate to take action by rooting out unfair practices. The Government want to ensure that that happens.

David Winnick: Will my hon. and learned Friend give way?

Mike O'Brien: I will, but before I do so, I say to my hon. Friend that he used very provocative descriptions of the energy companies, and I have one point to make to him. We are looking to those energy companies, their shareholders and their foreign boards to make about £100 billion of investment in the coming months and years, and to refer to them as he did is hardly likely to encourage that investment, much of which will come from abroad.

David Winnick: That may well be. I was going to defend the Government in one respect because until 1997 there was no winter fuel allowance at all. However, despite what my hon. and learned Friend said, everyone knows that the wholesale price of energy has substantially reduced, and he has said so on previous occasions. Are we to take it that the Government will use the utmost pressure to bring prices down, and if the energy companies refuse to do so, what action will the Government take?

Mike O'Brien: The Government want to ensure that people pay fair prices. As my hon. Friend knows, the energy companies buy much of their gas, the price of which feeds into electricity prices, on the forward market. The energy chief executives tell us that that operates about six months ahead, so the prices that we are paying this winter tend to be based on the ones that they paid a few months ago. Changes, therefore, take time to feed through. That is a problem for us, but when he asks whether we are determined to do everything we can to ensure that we get energy prices down to a fair level, the straight answer is yes, we will.
	We will ensure, too, that Ofgem does everything it can. This has been a hard year for householders and businesses, with price rises and dramatic fluctuations in energy costs. Earlier in 2008, there were dramatic price rises in oil, gas and electricity, and more recently, some of the wholesale prices have fallen, and oil prices have fallen from $147 a barrel to about $40 a barrel—it varies. Petrol and diesel prices have now fallen below £1 a litre in most places. This Friday in London, Energy Ministers will meet to discuss the oil market and how to stabilise prices and improve transparency, and I was fascinated to hear what my hon. Friend the Member for Carmarthen, West and South Pembrokeshire had to say. He raised some interesting points about the commodity market, and I would like to look at those in more detail.
	I mentioned prices falling, but that cannot be said yet about electricity and gas retail prices. Wholesale prices have fallen, but as I said, it is the forward price that is important. That is starting to go down, and I have met the chief executives and most of the main energy companies in the last week and clearly told them that we want them to bring down prices as soon as possible. They were able to give notice of price rises, and we want some notice of when they are going to bring down prices. We want a greater degree of transparency in the wholesale market because it feeds into the retail market. The pre-Budget report asks Ofgem to provide quarterly reports showing the relationship between wholesale, hedged-wholesale and average retail prices. That will make it clearer whether companies are passing on the benefits of downward price changes or not. It is important that falling wholesale prices are passed on to retail customers, particularly when they are under so many financial pressures.

Alan Simpson: Will the Minister give way?

Mike O'Brien: I am pressed for time, so if my hon. Friend will forgive me—[Hon. Members: "Oh, go on!"] I will give way.

Alan Simpson: From the discussions that the Minister is having with the energy company chief executives, he will be aware that their profits in the last year have doubled from £2.1 billion to £4.6 billion, while their contributions to fuel poverty have reduced from 2.1 per cent. to 1.2 per cent. The energy company executives whom I have spoken to about fuel poverty targets and obligations on social tariffs have said that they would move on these issues if instructed to, but so far neither Ofgem nor the Government have been willing to issue such instructions. Will the Minister at least consider doing that?

Mike O'Brien: If my hon. Friend speaks to chief executives, he will find that different ones give very different messages. Some of them favour a statutory or agreed basis for the licensed system of social tariffs, and others do not. Some of the energy companies did not have a social tariff, such as Scottish Power last year. The energy companies adopt different policies. I am anxious to ensure that we bring about a more sensible regime on social tariffs, because at the moment it is difficult for those on low incomes to work out who is the best person to go to. People claim to have large discounts, but as the hon. Member for Northavon (Steve Webb) rightly said, some of those with the apparently biggest social tariffs charge the biggest prices. The deduction comes out of such prices and people end up paying more. It is a very complex matter. We have to ensure, however, that the energy companies are not making false profits and that they are not ripping off the consumer, and we intend to do so.
	Ofgem has received a lot of criticism, and I understand that this House holds a critical view of Ofgem, and I think that Ofgem now understands that. If it had not before, it will as a result of the debate. I understand it, and I want to ensure that confidence in Ofgem is resumed. It has recently announced that it wants to eradicate unreasonable premiums, and that it will change some of the licensing rules to prevent such premiums from recurring. It has given companies until February to respond on licence changes, and to implement some of the changes in full. It tells us that there have already been £300 million of reductions in prices for consumers, and that a further £200 million need to be made by February.
	Ministers have met the main energy companies' CEOs and emphasised our determination to legislate unless they show that they have acted to end discrimination against prepayment meter payers and standard payment customers, as well as to deal with some of the other anomalies that have crept into their pricing programme.
	Legislation does not happen overnight in this place, but we are preparing to legislate should we need to do so. A referral to the Competition Commission, as suggested by the Conservatives, is an option, but it would involve a lengthy wait. CC reports can take 12 months to two years, so that would not help customers by February. It is a slow-lane response and it is not a sensible approach at present. Let us see if we can get this done; let us see if we can get some action from the energy companies and make sure that Ofgem keeps the pressure on them—with the hobnailed boots that Alistair Buchanan talked about on the radio this morning. We want to get this done without referring the matter to the CC, which may take two years. Ofgem has clearly said that it wants all these changes to be in place by February and we want that, too. Ofgem wants to get these reasonable results by February, but it also wants to sort out some of the licensing conditions and I want to be very clear on this: we will legislate if Ofgem does not get the changes it needs through.
	I am today placing in the House of Commons Library a comparative annual bill for each of the six energy companies based on a departmental analysis of the premiums they are charging for different kinds of payment based around the comparator of dual-use payments. For example, for average annual usage of electricity and gas, the highest annual dual-use bill is £1,240 from British Gas and the lowest appears to be EDF Energy at £1,168. On premiums paid for prepayment meters, British Gas came out the highest again at £158 and EDF was again the lowest at £78.80. On premiums above the cost for dual use on direct debit, customers paying by standard credit—those whom some people, including the Select Committee Chairman, the hon. Member for Mid-Worcestershire (Peter Luff), have indicated are a major issue—are likely to be paying more by between £109 with Scottish Power and £27 with E.ON. These are significant premiums and I want to be sure that they are justifiable. At present I am not entirely sure that they are; Ofgem seems to some extent to be sure, but I want to be sure that we are also happy with the figures.
	There are different ways of cutting these figures, and as there is competition they change regularly. When Members look at them, they will be comparing prices as of this week, and in many cases the sums are lower than they were some weeks ago when premiums were higher. However, although some of the companies have changed their prices in the past few weeks, Ofgem is still looking at them to ascertain if they are justifiable. The main justification for the expense of prepayment meters has been that they must be checked regularly. That was certainly true in the past when they were mostly coin meters, but nowadays they are often prepayment cards and the customer pays in advance, which brings a benefit to the company. Although Ofgem seems to some extent to be content with this, I am not convinced. Having seen today's Ofgem announcement, I want to drill down further into the justification for such a premium, which often falls on low-income people, and I have asked officials in the Department and Ofgem to look at this as a matter of urgency.
	I am conscious of the time, but I have not had an opportunity to deal with some of the key issues raised. We want to ensure that direct debit payments are looked at properly. I have some concerns and I have raised them with the chairman of each of the companies I have met. I have said I want them to justify some of the changes.
	In terms of our keeping the lights on, there is another energy gap—that which is in Opposition policy. I will not go into that now; we can leave for another day discussion of their failure to support the renewables obligation, and their opposition to coal-fired power stations, planning legislation and a number of international initiatives. Before they start criticising us for an energy gap, let me say that as far as we are concerned there are 10 GW of consents in process and 7.5 GW in planning. Even if the energy crunch does create some delays—we are looking at this with concern and I say to the Select Committee Chairman that since I gave evidence we have had some indications from some chairmen that a tightness is now developing in the market—we believe that there will continue to be investment. We are getting reassurances from the chairmen on that, too.
	On gas storage, the National Grid has as of yesterday updated its figures; its 2008 report indicates there is likely to be substantial new storage. I can go through some of the figures, but I am conscious of the time: 4.4 billion cu m existing; 1 billion cu m in construction; 3.3 billion cu m with planning consent; 1 billion cu m awaiting planning consent; and 12 billion cu m proposed, but planning not yet applied for. We therefore have quite a lot of interest in developing our gas storage.
	I would want to test some of the points raised by the Opposition spokesman if I had the time. The Government are committed to dealing with fuel poverty, to ensuring we keep the lights on, and to ensuring we have sufficient capacity to do so. The Government have every intention of delivering on that.
	 Question deferred (Standing Order No. 54(4)).

Andrew MacKinlay: On a point of order, Mr. Deputy Speaker. In the past 30 minutes the Metropolitan police have issued a statement as a result of their receiving the report of the Chief Constable of the British Transport police into the matter relating to the hon. Member for Ashford (Damian Green). However, I have tried to get hold of a copy of the report, but they say they are not publishing it. I then asked for a copy of their statement to be e-mailed to me, and by the time I came to the Chamber that had still not been forthcoming. Clearly, it is essential to Members that we have at least a copy of their statement, bearing in mind the clock is ticking and the recess is approaching, so time is short for Mr. Speaker to consider applications or submissions on whether this is a matter of privilege. Between now and 10 o'clock would it be possible for the Speaker's Office or the Clerk, perhaps, to use their good offices of leverage on the Metropolitan police to cede two things, the first of which is that there is available in the Vote Office or on the internet a copy of the Metropolitan police statement that is being issued to journalists as we speak? We need to have this tonight, not tomorrow. It is a matter of discourtesy that it is not being made available. I ask if there is any way in which you, Mr. Deputy Speaker, can help in this matter because we should have it available now.

William Cash: Further to that point of order, Mr. Deputy Speaker. I, too, am aware of the circumstances that the hon. Gentleman has just raised. At 7.45 pm I wrote to the Speaker because I believe this matter pertains to the privileges of this House, and the complaint I have issued in respect of the matter concerning my hon. Friend the Member for Ashford (Damian Green) is a matter of privilege. I, too, endorse the idea that we should ask for and/or demand a copy of this report forthwith and that it should be placed in the Library, and I have been asking the Library—as has the hon. Gentleman—for the last half hour to make provision for it to be supplied in the Vote Office or the Library. First, however, it seems to me that it might be appropriate for the Speaker to make inquiries and to insist it is made available to us because of the short time before the House rises.

Mr. Deputy Speaker: I say to both hon. Gentlemen that I have no knowledge of the matter they have raised. Clearly, this is an important issue and the House will want to study the statement. Both hon. Gentlemen can make their inquiries in the usual way, and their points of order are clearly on the record. Front Benchers of both main parties are present, so I trust the usual channels will take note of what they say.

department of Health
	 — 
	Dental Services

[Relevant Documents:  Fifth Report from the Health Committee, Session 2007-08, HC 289, on Dental services, t he Government response, Cm 7470, and the  Department of Health Departmental Report 2008, Cm 7393. ]
	 Motion made, and Question proposed,
	That, for the year ending with 31 March 2010, for expenditure by the Department of Health—
	(1) resources, not exceeding £33,990,717,000, be authorised, on account, for use as set out in HC 1039 of Session 2007-08, and
	(2) a sum, not exceeding £33,474,467,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs as so set out.— (Mr. Frank Roy.)

Kevin Barron: It might be helpful if I give some background to the report that we are now going to debate—sadly for somewhat less than two hours, as a result of the Government statements this afternoon. The Select Committee on Health published its fifth report of 2007-08, on dental services, on 2 July. We took evidence from a range of witnesses, including dentist campaign groups, primary care trusts, commissioners of dental services, public dental health experts, the British Dental Association, the Dental Practitioners Association and the British Orthodontic Society, as well as patient groups and practising dentists. The Under-Secretary of State for Health, my hon. Friend the Member for Brentford and Isleworth (Ann Keen), who sits on the Front Bench tonight, also gave evidence, as did the chief dental officer.
	One of the Committee's findings was that the nation's oral health has improved significantly since the establishment of the national health service general dental service or GDS in 1948. That is not surprising, given that most other things in society have improved since then. As recently as 1968, the proportion of the adult population in England and Wales who were edentate was 37 per cent. The latest figure is estimated to be about 6 per cent, so there has clearly been a massive improvement in dental health in recent years.
	Nevertheless, by the 1990s there was a powerful case for reform of the GDS contract. It was widely agreed that although the provision of NHS dentistry was good in some areas of the country, overall it was patchy. Moreover, the payment system lacked sufficient incentives for the provision of preventive care and advice. In addition, the Department argued that there were too many incentives to provide complex treatments. In April 2006, the Department reformed the GDS contract, making a number of far-reaching changes: primary care trusts were given the power to commission dental services; the patient charging system was simplified; and under the terms of a new dental contact, dentists were remunerated according to the number of units of dental activity—UDAs—completed. The Department issued a number of criteria for success: patient experience; clinical quality; NHS commissioning and improving dentists' working lives.
	Our inquiry found evidence that the new contract had failed to meet the Department's criteria for success in a number of areas. However, the Committee argued that with more good will from dentists and the Department, the contract could be made to work. The Committee's main findings were that access to NHS dentistry was not as good as it was said to be, and that the total number of dentists working for the NHS and the number of treatments they provided had fallen slightly since 2006. There are many reasons why dentists moved away from the NHS, one of which was the income available in our society now. This move happened in the parts of the United Kingdom—it certainly happened in England—where one would have thought that there were bigger incomes and more better-off people compared with other parts. In such areas, dentists on some occasions moved wholly into the private sector.
	The total number of patients seen by NHS dentists fell by some 900,000 between December 2005 and December 2007. The latest figures for the period from April 2006 to April 2008 show a decline of some 1 million in the number of patients seen. It is possible that patients have good dental health, so it is not necessary for them to be seen. I know that call-backs for people with good dental health are few and far between compared with a few years ago, when there were regular call-backs.
	The Committee also found that PCTs had performed patchily in how they commission services. For example, whereas in some areas, such as London, access was good, in others, such as Devon and Kent, it remained difficult for patients to find an NHS dentist.

Oliver Letwin: My constituency borders Devon, and I must report to the right hon. Gentleman that we find exactly the problem that he is describing: a shortage in the availability of NHS dentists. Does he agree that, in many cases, even if the area is relatively well off, there will be people within it who are not and who are suffering?

Kevin Barron: That is true. We took evidence, which was more than anecdotal, suggesting that some dentists who wanted to move into the private sector were saying to people, "We will take your children as NHS patients, but only as long as you take out private insurance on your cover." Hon. Members will see what our report said about that, but I must say that not many people defended that practice—I include the professional organisations in that comment. However, unfortunately the practice still goes on.
	In addition, the Committee found that strategic health authorities were poor at managing PCTs and gave a dentistry a low priority. We also found that the number of complex treatments, such as extractions and root canal work, has fallen under the new contract by 50 per cent. That was seen to be a consequence of the contract not providing dentists with sufficient incentives to carry out this type of work. That is one of the areas about which we were concerned. I have some views about it, given what the Department has announced in the past few days that it will do to address the situation, as we hope it will.
	The Committee found that the new dental contract had also failed to provide dentists with sufficient financial incentives to provide preventive advice, and that the system by which dentists are paid according to the amount of UDAs delivered should be changed. The Department should consider introducing payments based on quality and outcomes frameworks, such as we have in parts—although not all—of general practitioner practice. In those areas, people who have long-term conditions are being managed on the basis that GPs are providing such treatment. We believe that this is something that should be looked at.
	The Government's response to our report was published in October 2008. It accepted some of the Committee's criticisms, but maintained that the access to NHS dental services would improve over time. The Government response stated that although access was uneven, it was improving and would improve further once the contract had bedded in, and that the Department would investigate whether the number of complex treatments had fallen. The evidence was a bit more than anecdotal. We need to consider issues such as what happens if someone loses one tooth. Although a better way of proceeding would be to put in a crown or something substantial, under the new system dentists could just put in a palate with one tooth on it. That would suffice to get the UDA, and thus the income, into the practice. When we heard such information, we had grave worries about whether the issue of quality was being addressed at all in many senses.

Andrew Murrison: Does the right hon. Gentleman accept that because most dentists are professionals, they will try to do the right thing and provide a quality service? Does he also accept that a system in which an extraction is funded in the same way as complex root canal work, which can take many sessions to carry out properly, is extremely difficult and heavy on consumables, is unlikely to encourage dentists to aspire to quality dentistry, but far more likely to encourage them to do the bare minimum, which is not conducive to good oral health or dentition?

Kevin Barron: Yes, I do agree. What we have heard in the past few weeks about what is going to happen to NHS dentistry, however, abates a little bit my fears and I suspect those of other members of the Committee.

Norman Lamb: To follow up on the previous intervention, will the right hon. Gentleman also confirm that the statistics appear to demonstrate what was just said—that the number of root canal fillings being carried out has decreased significantly and the number of extractions had increased?

Kevin Barron: I am not sure about the extractions side, but I agree in respect of the more complicated work; there was evidence of a shift in that regard, and we could assume that the new contract was what created that.

David Taylor: Further to the point made by the hon. Member for Westbury (Dr. Murrison), did the Committee find that the width of the UDA banding—I am told that one extraction counts for the same as four or five—was a disincentive to some dentists to enrol patients who needed substantial work to get them to the start line? Was that one of the reasons for people finding it difficult to get an NHS dentist?

Kevin Barron: That is the case, and we took evidence to that effect. Some of the more complicated cases were shoved into the acute sector—into hospitals—which was wholly wrong. That is not where such treatment should take place.
	The Government also agreed that the historical means of funding PCTs should change and that funding should be based on the needs of the population. That is one of the great difficulties, because the new contract wanted to improve access to NHS dentistry services, but it also had to ensure that we did not lose any more dentists to the private sector. We found that the funding for the activity in question was historically based where NHS activity had been high—and quite right, too. My constituency and the surrounding area are well served, and I would not want to see that diminish. That may sound selfish, but in other parts of the country dentists have walked away from the NHS and we have an obligation to look after the interests not only of the population, but of the dentists who did not walk away but continued to provide a service under the NHS banner.

Bob Spink: In my constituency dentists walked away from the NHS. The right hon. Gentleman will welcome the 11 per cent. increase that the Government have put in, but can we be confident that the new formula will distribute that money on the basis of unmet need on this occasion? The key problem with the contract was that the basis of allocation by the PCTs was a historic and restricted view of previous spending.

Kevin Barron: That is precisely the area in which the Government agreed with the Committee. The contract had to be historic, because we had to defend existing NHS dentistry. The question whether that funding was based on the needs of the population is one of the most difficult when it comes to expenditure on the NHS—I have in mind the debate on improving primary health care. The question is where the disease burdens lie, and answering it is still a problem.

Peter Bone: It appeared to me from the evidence that we received that dentists did not walk away, but reluctantly left the NHS. They felt that they were forced to leave the NHS because of the contracts.

Kevin Barron: That is not my reading of the situation. Dentists walked away in areas of greater income. We also heard about offers to keep children on as NHS patients provided that the parents took up private insurance. I thought that that was wrong, and the Committee commented on it, but it was part of the same problem. Money gives people the option to make different decisions. My personal view is that in some parts of the country—even in south Yorkshire—dentists decided to walk away from the NHS because they felt that enough people had enough income to sustain private insurance.

David Drew: My right hon. Friend describes the situation in my constituency. In the south, we have nothing but NHS dentists. They make the contract work, they think that the rewards are perfectly satisfactory and they are great supporters of the NHS. In the town of Stroud and its immediate environs, almost all the dentists are now private. In effect, there are two systems and it is as if the Berlin wall exists between them. Occasionally, people can cross over into the other system, but private dentists do not seem to want to come back into the NHS. If there is a magic bullet that will change that, I hope that someone will tell me, because I would love to get them back.

Kevin Barron: My hon. Friend makes his case.

Norman Lamb: Will the right hon. Gentleman give way?

Kevin Barron: I meant to be very brief, but I will give way.

Norman Lamb: I am very grateful. The right hon. Gentleman argues that it is mostly in wealthier areas that dentists are leaving the NHS, but in rural Norfolk, where we have a low-wage economy, 20 per cent. of dentists left the NHS on the introduction of the new contract. Does he agree that in surveys dentists have expressed overwhelmingly negative views about the contract? The contract as a whole, and the bureaucracy involved, has driven many dentists away, as they believe that they can make an income in the private sector.

Kevin Barron: I would not disagree with that point, but over the past 15 years or more improvement in services in the NHS—be it in dentistry, GP care or hospitals—has been most successful if the professions have had ownership of it. In 1992, when the first new dentistry contract was introduced, large parts of the profession walked away from it and there were divisions in the representative bodies. It is my personal view—it is not articulated in this way in the report—that the new contract, like the 1992 contract, isolated the profession, to the disservice of dentistry in this country. When I said that at the press conference to launch the report, there were nods from some of the representatives of the dentistry profession, although in the press the next day they were reported as attacking the new contract and saying that it was all wrong. However, that is life, and we have all been there.

Charlotte Atkins: My right hon. Friend makes the important point that many dentists walked away from the NHS long before the 2006 contract was introduced. Many towns were NHS-dentist deserts for many years because the PCT had no way of ensuring that NHS dentistry was provided. The dentists could decide, on their own whim, how much NHS work they did and how much private work.

Kevin Barron: I agree. I do not think for one minute that the lack of NHS dentistry is just to do with the new contract. It was happening for many years before that, and in my personal view the lack of professional leadership was one of the main issues. Dentists were not engaged in the process. When we considered NHS charges, I asked a representative of one of the professional bodies what effect the new contract had had, and I cannot remember the exact response but it was along the lines of "We pass comment on it from time to time." That is not the type of engagement that was envisaged. It is a great pity that we have lost professional leadership at that level, in terms of negotiating contracts for dentistry inside the NHS.

Michael Penning: The professional bodies can defend themselves, but one of the reasons for that response is that they felt that the decision was imposed on them. It was not piloted, and the evidence from the previous pilots was ignored. If it had not been imposed on them, they might have stayed around the table to discuss a better contract, but it was imposed without their agreement.

Kevin Barron: Yes, but it was also imposed because they were not engaged in the process. In all the subsequent contracts, such as the hospital doctor contracts or the GP contracts, we have seen what some would call good trade union leadership in the negotiations. I would call it good trade union leadership—it is what I used to do before I came here as a politician—and my reaction is "Well done." That is what people should do from that side of the table. There has been a lack of such leadership in dentistry, not just in the 2006 contract but for a substantial number of years before that, too.
	The Department also said that it would reconsider the unit of dental activity payment system to see whether it could also include quality of treatment. It did not rule out our suggestion of a quality and outcomes framework for style indicators in dentistry. Members will know that an announcement was made about that last Friday. The chief executive of the NHS was giving evidence to the Health Committee on Thursday morning and we asked him a question about dentistry. He replied, "Oh, we are about to make an announcement." I said, "Great, you normally make an announcement before you come to give evidence to us or before a debate." To be fair to my hon. Friend the Minister, the Government said in their response to our recommendation 41 that they would review NHS dentistry. Indeed, on 11 December the Secretary of State announced a change to the Department's line that the reforms to the contract were working and that over time they would deliver improved access. Those are my words, not those of the Department, but I think that there has been a slight change of thinking. The Secretary of State acknowledged that access to NHS dentists remained a problem in many areas of the country and announced the review of the dental contract, which was already contained in the Government's response to the Committee in October.
	The review will be led by Professor Jimmy Steele, who chairs oral health services research at the school of dental sciences in Newcastle. I alluded earlier to the people at our press conference. One of them, Susie Sanderson, who is the executive board chairman of the British Dental Association and who gave evidence to the Committee during our inquiry, said last week:
	"The BDA is pleased to see the long overdue announcement of a review of NHS dentistry in England. The announcement recognises the significant problems patients and dentists face and places the Department of Health on a path to addressing those problems."
	I am pleased that the Government have announced that review and will, I hope, address the issues brought up in our report. One of the key aims of the review, contained in the second bullet point in the Secretary of State's press release, is to:
	"Recommend how the Government can best address the issues raised in the Health Select Committee's 2008 report on dentistry including the suggestion that more treatment bands are introduced."
	That referred to the system of three treatment bands. Under the old contract we had 300 or 400 different treatment bands, and I am not sure that we would want to go back to that, but we took evidence that suggested that introducing a few more bands would make the system a lot fairer than it was.

Oliver Letwin: The Chairman of the Committee is being very generous with his time. Does he envisage that the change to the quality and outcomes framework will somehow enable dentists in the NHS to provide more preventive care despite a system based on units of dental activity?

Kevin Barron: Yes, I would hope that it would. That was one of our major criticisms. It was said by my hon. Friend the Minister's predecessor that the new contract was about prevention. We tried hard to find out whether it was and my personal conclusion was that it was not. In this day and age of public health there are wider issues in relation to dental health and we believe that the contract did not place sufficient emphasis on prevention. Its importance should be recognised. In my view, the advice that health professionals give people should be measured and recognised.

Sandra Gidley: It is probably fair to mention that the chief dental officer said that an element of preventive funding was included in the single UDA, but the evidence we took from dentists suggested that so much was included in the UDA that there simply was not time to do the preventive stuff as well as treating the patient.

Kevin Barron: The inclusion of more bands for the UDAs might be a way of addressing that problem. The smaller bands, which might not get as much money into the practice, would tackle that issue.
	I hope that the review will deal with that. We should not prejudge matters, but the Health Committee will be looking at the outcome of the review to make sure that a preventive agenda is put firmly in place, and that the people who carry it out are properly compensated.
	There is one other matter that I want to touch on before I sit down. The review talks about identifying over the next five years how
	"developments in workforce planning, training and regulation can best support the provision of high-quality dental services and enhance the working lives of dental professionals".
	In our report, we talked about vocational training and recommended that the fact that some dentists take on students should be recognised. My hon. Friend the Minister attended the session at which the chief dental office gave evidence, and she may remember that he spoke about what is happening in south Yorkshire and about the links with the Sheffield university dental school.
	By pure coincidence, I went last Friday to a practice in the seat represented by my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith). I was there for the official opening of an outreach training surgery in a village called High Green. The dentist who runs the surgery also runs one in my constituency, and it so happens that, as a working dentist, he gave evidence to the Committee about the new contract.
	We asked the chief dental officer about what was happening with the outreach, on-the-job training of dentists. In answer to question 766 in evidence 98, he said:
	"With undergraduate education we have examples of outreach teaching in Sheffield; we have visited two practices in Sheffield where they are working with the PCT and the dental school and a part of their contract is to provide outreach teaching and does not have to be monitored by UDAs."
	My understanding was that the payment of UDAs to such practices was reimbursed by having the students get experience. In other words, the practices get paid for having students on an outreach programme by negotiating more UDAs. If one measures UDAs according to how many patients are getting treatment and then finds that some are being used for student training purposes, the result will be that incorrect figures will be produced. It is not a massive problem, but it is not the best way to proceed.
	I asked the chief dental officer whether he thought that that was a right and proper way of reimbursing a dental practice for having students, and he answered:
	"I do not think undergraduate training should be directly linked to UDAs".
	As I said, I was at the High Green surgery last Friday to do the official opening of the outreach training surgeries there. The two principal dentists there are Michael and Margaret Naylor, and they said:
	"We strongly believe in the provision of good quality dentistry within the NHS and we welcomed this opportunity to have students working within the practice to whom we could pass on our knowledge and enthusiasm and to give the students a window of experience of working within a busy NHS practice."
	One of the students, Rachel Ingle, said:
	"I found my confidence increased hugely as a result of my experiences and I feel better prepared to start work as a dentist."
	It was a big gathering, and I asked the commissioners how the outreach programme was being paid for, and how the practice was being rewarded for having the students. The High Green practice takes students from the dental school on six-week work placements, and I was told that it was normal for one dentist to have four students. The process takes time and, although the work involved is obviously not massively complicated, the students do spend time with the dentists who are training them. Inevitably, that slows down the amount of activity that takes place, but the same is true for trainee doctors and surgeons under close supervision in hospitals, where students are obviously not asked to carry out important work. When I spoke to the commissioners, they—not the dentists concerned—said, "Things are still the same." They said that they were looking into negotiating UDAs, so that they could reward the practice for giving vocational training to students from Sheffield university's school of clinical dentistry.
	To conclude, as I said earlier, Michael and Margaret Naylor have a practice in my constituency, quite close to my constituency office in the village of Dinnington. I am an NHS patient there. As I said to the chief dental officer, next door to the dentist's surgery there is a pharmacy, and next door to that is a doctor's surgery, run by four or five partners. That doctor's surgery gets capital allowances, and does not have to negotiate in the way that dentists do. It is a lot more engaged in building up NHS work than dentists are. I understand that dentists can move away from the NHS; we have heard evidence of that. However, there is something wrong if the only way in which income can go into an NHS practice is through UDAs, or what we had before them. That is how I understand the situation; my hon. Friend the Minister may know something different. Dentists do not have the type of capitation fees, or whatever we call them, that are in place in general practice.
	If we are genuinely to look at improving national health service dentistry and to review it, it needs to be reviewed in a comprehensive way that takes into account many of the issues that I mentioned, and not just vocational training for dentists, although that is important. People will be aware that since the Government have been in office, two new dental schools have opened in the United Kingdom. Vocational training is an important part of getting good dentists working in our health care system. That can only be done if the work is rewarded in a sensible way, and if the reward does not have to be negotiated in the way that I am led to believe it is negotiated at the moment.

Norman Lamb: I start by thanking the Chairman of the Select Committee, the right hon. Member for Rother Valley (Mr. Barron), for a very fair summary of the Select Committee's conclusions and recommendations. The Committee's conclusions on how the contract was operated were pretty damning. In paragraph 26, it said:
	"The Department asked for the contract to be assessed according to its own criteria for success: patient experience; clinical quality; PCT commissioning; and dentists' working lives. We conclude that the contract is in fact so far failing to improve dental services measured by any of the criteria."
	That is a pretty damning conclusion.
	The review announced last week, which, as the Select Committee Chairman fairly said, was mentioned in the Government's response back in October, seems to be an admission of failure by the Government. For far too long, there has been a sense of denial by the Government that there was any problem with the contract. Back in February, the Secretary of State said:
	"Access...is getting better all the time."—[ Official Report, 5 February 2008; Vol. 471, c. 772.]
	In June, he said:
	"'It's getting better all the time', to quote a line from a track on 'Sgt. Pepper'."—[ Official Report, 17 June 2008; Vol. 477, c. 801.]

Ann Keen: It is.

Norman Lamb: I hear the Under-Secretary of say that that is true and she repeated the mantra at Health questions today, when she said that access was improving. However, all the evidence points in exactly the opposite direction. I fail to understand how she can continue to assert that access is improving.
	I want briefly to highlight some of the failings of the contract that the Health Committee identified, and to refer to the principles that should be applied when we review how the contract works and come up with a better way forward. First, as was highlighted by the Select Committee, the contract was imposed without being trialled. Rather like the Medical Training Application Service—the basis for recruiting junior doctors to specialties—the contracts were imposed by the Government. The right hon. Member for Rother Valley was absolutely right to suggest that we need engagement and ownership by the professionals if we are to ensure that reforms to our health system work to the greatest effect. Without ownership—and that is what happens if we impose a system—the system is unlikely to work effectively.
	Access, despite what the Minister continues to say, is worse: 1 million fewer adults and 200,000 fewer children have had access to NHS dentistry since the reforms came into effect in April 2006. Before the reforms, the Government claimed that 2 million patients wanted access to NHS dentistry, but they could not get it. On the assumption that those 2 million remain, together with an extra 1.2 million people, there are now well over 3 million people, on the Government's own figures, who want access to NHS dentistry but who are not getting it. As the previous Prime Minister said, the purpose of the new contract was to provide "access for all" who wanted it to NHS dentistry, but it was also to get dentists off the treadmill. The right hon. Member for Rother Valley was absolutely right: the previous contract was not a success, either.
	We heard an intervention from the hon. Member for Staffordshire, Moorlands (Charlotte Atkins), in which she made a fair point, and I am certainly not arguing for a return to a better yesterday—the old contract failed miserably in many respects. The new contract, however, continues the failure on access.

Andrew Murrison: The hon. Gentleman is right that the old contract had its faults—most contracts do. However, does he recall the personal dental services pilots that worked quite well and showed great promise? The Government, however, decided to jettison them largely, I suspect, for political reasons. Does he not regret the fact that lessons were not learned from those pilots?

Norman Lamb: I absolutely agree. The failure to pilot schemes or to learn the lessons from pilots that have taken place is desperately frustrating. A system that was introduced without being trialled, in a big-bang approach across the country, was destined to fail. The hon. Gentleman is right to say that the Government should have learned the lessons from those encouraging pilots, which were completely ignored.
	The Government's second assertion when the new contract was introduced was that it would get dentists off the treadmill. However, it appears to have reinforced the treadmill that many dentists believe they are on. We have heard that there is a disincentive to do complex work leading, dentists have told me, to a loss of skills. If they do not do that complex work, they become less skilled, which is worrying. There has been a 45 per cent. fall in root canal work since 2004 and, to confirm the point that I made in an intervention on the right hon. Member for Rother Valley, the number of extractions has risen in the same period.

Charlotte Atkins: Further to the matter that I raised earlier, does the hon. Gentleman accept that the trend for a reduction in complex treatments kicked in before the new contract was introduced in April 2006? It was something that had already been identified as a problem. I should like to establish why that happened, as I do not think that it is automatically clear.

Norman Lamb: That may well be the case, but there is no doubt at all—and I think that the Health Committee report confirms this—that the new contract provides a disincentive to do that work, and the trend has continued with a vengeance since its introduction. In its conclusions, the Select Committee highlighted its concerns, particularly with regard to the loss of complex work, about the quality of dental care that patients who rely on the NHS receive.
	There is a related problem: if someone is referred by their usual dentist—in the past, that work would have been done by that dentist—they have to wait again, perhaps in considerable pain. The Select Committee recognised that that was an unsatisfactory situation and that, more often than not, it is appropriate for the work to be done by someone's own dentist. The point has been made repeatedly, both in the debate and beforehand, that there is no proper incentive for dentists to do preventive work, and the system does not emphasise quality. As I pointed out in an intervention, it is massively unpopular with dentists.
	UDAs are a sort of straitjacket that has been imposed on the profession. There is a great deal of evidence of dentists running out of UDAs before the end of the year, so they are left with no paid work to do under the NHS. If ever there was an incentive for someone to leave a system that imposes such a straitjacket, surely that is it. Even worse, dentists who do not reach their UDA target, perhaps because it has been calculated incorrectly, end up having to repay money that has already been paid to them. I have a dedicated NHS dentist in my area who gave up in disgust after he was required to repay a substantial sum because he had not met his target.
	There is clear evidence of a shortage of orthodontic work, leading to long delays in many parts of the country. A further problem is poor-quality commissioning. There is accumulating evidence that primary care trusts are not taking advantage of the powers that they have and using those powers to good effect. By not carrying out dental health needs assessments for their areas, they are commissioning not on the basis of need, but on the basis of where dentists happen, by historical accident, to be. In Norfolk dentists have been allocated additional UDAs for the rest of the financial year, but they are reluctant to invest in new facilities and in bringing in extra dentists if they have no guarantee that that will continue, so the UDAs go unused.
	There is, however, some evidence of good quality commissioning taking place in some parts of the country. I refer in particular to the Heart of Birmingham PCT. I heard an extremely interesting presentation from Ros Hamburger, the public dental health specialist there. In that primary care trust, the contract has been manipulated to reduce reliance on the UDA for the payment of dentists. Instead, payments are based on quality thresholds and preventive work, adjusting the contract in a constructive and positive way. Time will tell whether it works and whether that lesson can be learned elsewhere, but it is right to point to the fact that good things are going on in some parts of the country.
	Concern has been expressed about the allocation of funding around the country and the importance of moving to a needs-based system for the allocation of funds. Many dentists are expected to leave in 2009. That is the expectation in the profession, and I suspect that that fear is driving the Government to get on with the review announced last week.
	All that leads me to ask whether that rather Soviet-style commissioning of care, rationed from the centre by an unelected quango, can ever work effectively. It clearly turns dentists off. Too often, they are left frustrated. The Minister shakes her head, but if she talks to dentists, she will find that that is what they say. They are left frustrated by slow, inefficient responses from the primary care trust. As we know, the PCTs have failed to identify where the need is and to allocate UDAs accordingly. The system is not working and the temptation for dentists all too often, not just because of the money, is to escape to a simpler life where they are their own bosses and where they do not have to deal with such a bureaucratic system.
	As the Select Committee also recognised, there is a need for fundamental reform—the Chairman referred to it as a fundamental or comprehensive review—of how the system operates.

Kevin Barron: indicated assent.

Norman Lamb: The right hon. Gentleman is nodding from a sedentary position.
	What principles should apply in shaping that reform? First, a set amount of public money is available for dental care, and I suspect that no political party in the Chamber will advocate at the next election a massive increase in that amount. The challenge is to maximise the effectiveness of the money available for NHS dental care so that it improves the nation's dental health.
	I turn to the second principle. I am sure that we all agree that the objective is to achieve access to high-quality dental care for all. Some people achieve that access by paying for it. Ten years ago, our dentist announced that he was going private. We wanted to stay with him, so we reluctantly ended up on a Denplan scheme. I do not like paying it, but I get used to it and ultimately can afford it. Our concern should be for those who cannot. The right hon. Member for West Dorset (Mr. Letwin) said that there is a real problem with low-income people in areas that are generally affluent; they often find that they have hopeless access to NHS care. In rural Norfolk, which is not a particularly affluent area, there is certainly poor access. Our focus should be on those who cannot afford to go private. We must ensure that they get access to high-quality dental care.
	The third principle is that we must focus on children's dental health, because if we get it right during childhood, the chances are that a substantial amount of work will be avoided later in life. Advances such as the use of fluoride in toothpaste and, in some areas, the fluoridisation of water, have had a significant effect in improving dental health. The fourth principle is that—please—we should involve the profession in shaping any reform. If we fail to do that, the reform will not work. We should trial any reform first and we should not go for a big-bang introduction, because that will end in tears.
	Despite the Minister's denials today, the Government appear tacitly to have accepted that the contract is not working as intended. The clear conclusion of the Select Committee is that the contract has not achieved the objectives set at the start. Now there is the opportunity to get it right, and it is important that we do so because many people on low incomes in our country are not getting access to high-quality dental care. We must focus our attention on them.

Charlotte Atkins: I am delighted that the Health Select Committee finally took up my suggestion of holding an inquiry into dental services. For a long time, dentistry has been a much neglected area of UK health care. Perhaps that is because people do not generally die from dental decay, although a meeting of the British Dental Association panel the other day showed some alarming results for oral cancer and how dentists can save lives by ensuring that oral cancer is picked up early and treated effectively.
	Dental decay is not a death sentence, so it is not regarded as a top priority, certainly among many primary care trusts. However, we ignore dental health at our peril. Oral health is integral to general health. In 2003, the World Health Organisation's "World Oral Health" report stated:
	"The interrelationship between oral health and general health is particularly pronounced among older people. Poor oral health can increase the risks to general health and, with compromised chewing and eating abilities, affect nutritional intake."
	However, good oral health is a major issue not only for older people but for a range of people of all ages. It is particularly a problem for people from deprived backgrounds in terms of pain control, discomfort, and general self-esteem. Having decayed teeth makes a huge difference to the confidence of young and middle-aged people.
	Before the new NHS payments system was introduced in April 2006, there was significant confusion and fear about the burden of dental costs, with up to 400 different charges possible and a maximum payment of some £389. The new system has simplified that charging mechanism to three charging bands, with maximum payments almost halved to £198.

Andrew Murrison: Does the hon. Lady accept the central truth that more people pay more under this scheme than under the previous one?

Charlotte Atkins: I have not seen the figures to prove that, but there are certainly issues with the three bands, and there are perverse incentives for people to store up dental health problems. The Select Committee on Health, of which I am a member, rightly identified some of those problems. The three bands have not been developed well and they need to be looked at again. Simplification of the charging system is vital because someone on a low income needs to know that if they go to a dentist, they can pay the bill. There was also a lot of confusion over whether people were paying for private or NHS treatment. People must be clear about what they are paying for so that they are not encouraged to take up private treatment when they cannot afford it.
	I am also pleased that the legacy of the old system whereby dentists provided NHS treatment to young people under 18 only if they treated their parents under a Denplan or other private care scheme has largely gone. It cannot be right to coerce parents to register as private patients as the only way of ensuring that their children get NHS treatment. The Chairman of the Committee rightly pointed out that our witnesses were clear about the fact that that should not be accepted. I understand that the chief dental officer has made it clear that children-only contracts with dentists have no long-term future in terms of PCT commissioning, but some PCTs have maintained them because they are concerned about the shortfall in treatment for children.

Paul Beresford: The hon. Lady has touched on something that I was going to say, which is a contrary point. My concern is that dentists who have children-only contracts will pull out of the national health service completely and those children will not get the service.

Charlotte Atkins: My argument is that it is right to have dentists choosing either private or NHS care. I was very concerned about the case of a constituent who had been in a contract whereby she and her husband were on a Denplan deal, and their children were being treated under the NHS. Through the new PCT commissioning arrangements, the local dentist had said, "Actually your children now have to be under Denplan." They reluctantly agreed to that and were amazed when, after one of the children had a filling, they were charged £50 on top of the Denplan rates for it. They were absolutely flabbergasted, because they had assumed that the children would be covered in full for all their treatment, but they were not.
	There are lots of concerns and we have to come up with a solution. I hope that the review that the Government are conducting will look into how extensive children-only contracts are, whether they can be avoided and whether stopping them in areas where they are creating problems would cause a shortfall in treatment for children, which we must avoid.

Peter Bone: I am listening to the hon. Lady with interest. My experience is that if NHS dentists were available, people would go to them. In the circumstances that she is describing, surely it is better that at least the children are on the NHS than that nobody should be.

Charlotte Atkins: My point is that the Government's priority must be to ensure that everyone who wants it should have access to NHS dentistry. I therefore very much welcome the independent review of NHS dentistry that the Health Secretary announced last week and look forward to the results of the study that is due to be published next spring.
	It is clear that there are still huge variations in access throughout the country. We need to learn from areas where good practice has become embedded. Ten years ago, I worked closely with the dental department of North Staffordshire hospital to encourage forward-looking dentists to relocate to north Staffordshire. I was delighted to welcome Jonathan Webb to Leek, where, after quite a struggle, he opened a new NHS dental surgery in Regent street. I was also delighted to perform the opening ceremony and to sign up as his first NHS patient.
	I think that Mr. Webb thought, misguidedly, that the practice would be a nice little venture and that he could coast through to retirement. However, 10 years on, and with lots of encouragement from North Staffordshire PCT, Mr. Webb now has more than 20,000 patients. His practice, which is called TLC 4 Smiles, has relocated in Leek and now includes eight surgeries, four full-time dentists, one part-time dentist and three full-time hygienists and therapists. The practice is 96 per cent. NHS, with just a small amount of private cosmetic work.
	Mr. Webb was one of the pioneers of working with qualified Polish dentists to help plug the gaps in NHS dentists that we experienced, both in 2006 and before. He has pointed out to me—normally when I have had my mouth wide open so I could not respond—that the training that those Polish dentists have received does not fully equip them for the different culture and tasks that they face in the UK. It is not that they are not properly qualified; it is that things are a bit different in the UK. Mr. Webb needed to put in extra work with those dentists, but the new contract did not compensate him for his efforts—efforts that PCTs should recognise as essential to ensuring that dentists are delivering high-quality dental care in an NHS service that is of the appropriate standard.
	In October this year—some 10 years on—in Biddulph, on the other side of my constituency, I was delighted to perform yet another official opening ceremony of an NHS dental surgery. It took me three years to persuade my local primary care trust of the urgent need for such a surgery, because it did not figure as a high priority for the PCT. I believe that that is a problem countrywide. Once it was established that the need was there, however, the PCT was very supportive of the dentists, Mr. and Mrs. Keen—who, as far as I know, are not related to the Under-Secretary of State for Health, my hon. Friend the Member for Brentford and Isleworth (Ann Keen).
	The PCT helped to secure the right building for Mr. and Mrs. Keen—just behind the high street—and the right contract, so that Biddulph people, who had been denied access to NHS dentistry for so long, would be prioritised as patients in that surgery. We avoided the long queues around the block by directing applications through the PCT, but that has not halted the expansion of the practice. Although it has been open for just three months, it is already recruiting an additional dentist, and has the capacity to develop three more surgeries.
	This is a young dental team who have enthusiastically embraced NHS dentistry and have the passion that will allow them to take on the challenge of huge inequalities in oral health in the town of Biddulph, which is an old mining town. That is not to say, however, that there are not significant issues relating to the NHS dental contract that must be addressed. It is widely recognised that PCTs are not renowned for their commissioning skills. In general, they seem to lack the necessary analytical and planning skills to carry out that role effectively.
	With the commissioning of dentistry coming at a time of PCT mergers, dentistry clearly did not receive the priority that it deserved. As a result, access to NHS dentistry has deteriorated rather than improving with the new contract. But at least, through the GDS contract, we can now address the uneven and inequitable distribution of NHS general dental services. In the past, there was no mechanism to allow that. The people of Biddulph either had to travel out of the town, or had to sign up for private dental treatment through Denplan. Most of them—unlike the hon. Member for North Norfolk (Norman Lamb)—could not afford that. They were at the mercy of the decisions made by their local dental practitioners, who could decide for themselves how much NHS and how much private treatment they provided.
	That all changed when the PCT awarded the NHS contract to Mr. and Mrs. Keen. Not surprisingly, many Biddulph people are choosing to move to NHS treatment in their state-of-the-art surgery, because they are now empowered to do so. I am pleased that the Department of Health is belatedly offering a programme of work to PCTs to encourage them to commission more effectively, and is reviewing its dental public health work force so that it has the skills to assess the need for better NHS facilities. That should help PCTs to get their act together.
	As for the NHS dental contract itself, there is a real need for a review of aspects of the reforms. It should be established, for instance, whether the units of dental activity so hated by dentists can allow a proper focus on preventive care and cosmetic treatment. Now that the dental health of our young people is so much better, there is clearly much less need for the drill-and-fill approach. They demand much better cosmetic and orthodontic treatment, and we should focus on that. We must also look again at the payment bands to ensure that patients are not encouraged to delay visits to their dentists and store up dental problems in order to save money under the new charging system. We must ensure that the UDA system is used flexibly enough to allow dentists to get off the drill-and-fill treadmill and to address the wider public health agenda. That is what primary care trusts were set up to do, and they must do it in the area of dentistry as well as in other areas of public health.
	PCTs must make more use of specialists and consultants in dental public health and carry out more effective oral health needs assessments. They must work more closely with their dentists to ensure that they are addressing the real oral health needs of their populations. They have to address the other health needs of their populations; why are they not doing it in relation to oral health? And where are the strategic health authorities in all this? They seem to have completely reneged on their responsibility to manage the dentistry performance of PCTs. The Department of Health needs to investigate with the profession whether the quality and outcomes framework-style system that GPs have would help to improve the dental health of patients.
	I welcome the closer working relationship that appears to be emerging between the Department and dentists. I also welcome the top priority that the Government are giving to improving access to dentistry, the increased £2 billion funding for dentistry and the announcement of further action in the new year to improve access. I am sure that the Committee will look carefully at those new measures.
	I want to finish by thanking the Health Secretary for the £14 million a year for local health authorities to support fluoridation schemes in areas of poor dental health. That is the single most effective measure to reduce oral health inequalities, and this provision demonstrates that we have a Government who are committed to doing that. I would also like to congratulate the South Central strategic health authority on being the first SHA to undertake a fluoridation consultation under the Water Act 2003. I wish it every success in its initiative, and I hope that the Government will give it all the support that it needs. Dental health in the United Kingdom is improving, but far more needs to be done through fluoridation and through working with the profession to ensure that we make the best of the health professionals working in dentistry.

Sandra Gidley: I am interested that the hon. Lady mentioned fluoridation. Is she aware that most of the evidence is showing a case for fluoride relates to its use in a topical sense, and that the evidence base for adding fluoride to the water supply is very limited? Some countries have actually removed fluoride from the water. I think that her enthusiasm is slightly misplaced, because the improvements in dental health in areas where fluoride has been added to the water have not been as great as had been expected.

Charlotte Atkins: That is absolute rubbish, I am afraid. That is not the case at all. I benefited greatly from being brought up in an area where there was a huge amount of fluoride in the water; it made a huge difference to our oral health. If we compare the situation in fluoridated Birmingham with that of Manchester, we see that the evidence demonstrates the benefits of adding fluoride to the water.

Paul Beresford: I am going to try to rush through my speech, and to add to, rather than repeat, the points that have already been made. In his introduction, the Chairman of the Committee said that there were three drivers or criteria in the original contract and that, from the point of view of the dental patient and of the profession, it had certainly failed. We do not have a more preventive approach now, dentists are on a treadmill as they have never been before, and there has been a transformation, in that many dentists have moved out and many thousands more wish to do so. We really need to find a system that will encourage many of those dentists who have gone totally private to come back, at least in part. The difficulty with that, of course, is the treadmill I mentioned and the avalanche hanging over every dentist with UDAs—units of dental activity—and the UDA contract.
	The difficulties of the UDA system—for example, the issue of whether to do root canal treatments or extractions—have already been touched on. A root canal on a molar tooth will take about 90 minutes, if the dentist is practised at it and if they use very expensive nickel-titanium reamers, which must be thrown away. In contrast, an extraction generally takes 15 minutes and the forceps are retained, which provides quite an incentive to the dentist, sadly.
	What really worries me is that according to NHS information centres, in excess of 1.2 million people are no longer able to access the national health service. That applies to about a million adults and, even more appallingly, about 200,000 children. That has got to be overcome. The hon. Member for North Norfolk (Norman Lamb) mentioned that it is anticipated that many dentists will leave next year. The only benefit of the credit crunch that I can see is that they might be tempted to stay.
	Let me move on to two other issues: the development of dentistry and the patient, who has not really been mentioned so far. Over the last 10 or perhaps 12 years, there have been dramatic changes in dentistry, mostly positive and with most gains predominantly experienced in the western world, by which I mean the United States, Canada, Australia, New Zealand, parts of Europe and to some degree in the UK, but outside the national health service.
	Mention was made of fluoridation, and I would like to re-emphasise the point made by the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) and to contradict the intervention from the hon. Member for Romsey (Sandra Gidley). Fluoridation is heavy in many of the countries I mentioned. It has made a huge improvement to the diminution of dental decay and without the detrimental health side-effects that were predicted by a few and were proclaimed by scaremongering detractors. Let me take a few moments to explain more fully.
	When I was a kid in New Zealand, dental schools provided dental nurses to work in state schools—New Zealand's schools are almost entirely state schools—and there were three dental schools. With fluoride in 60, 70 or 80 per cent. of the country's water supplies, those dental schools have been diminished to one. There are more schools, more children and more teeth, but there is less work. Instead of having three dental schools, as I said, New Zealand now has one, and the girls who come out of it who go to treat the children spend 50 per cent. of their time teaching prevention and 50 per cent. on actual treatment. Only a sixth of the number of children need treatment now, yet the effect of fluoride in the water supply has a lesser effect on children than on adults.
	Let me come back to the changes in dentistry. Progress on dental materials and techniques has been dramatic. Dentistry provides very successful implants, new composite fillings, new all-porcelain crowns, porcelain inlays, protective porcelain inlays/overlays and new materials for dentures, many of which can be and often are retained and stabilised by implants. There are beautiful, natural-looking veneers, protective overlay veneers, successful dental bleaching methods, dramatic new orthodontic techniques producing quite superb results and improved oral surgery techniques. Protection against cancer is also better if patients go to the dentist.
	We need to recognise that dentists are taught all those techniques in dental schools, but they are not available on the national health. I do not think that they should all be available on the national health. NHS dentistry should be driven predominantly as a health service for oral conditions. I am sorry to disagree somewhat with the hon. Member for Staffordshire, Moorlands, but although cosmetics are vital, the NHS should have no role in paying for them, except in exceptional circumstances, which do arise. A young girl who comes in with stained upper and lower anterior teeth should have bleaching available to her on the national health service. As the system works now, however, she will get six or 12 veneers where the teeth are stripped down via a high-speed burr and damaged for ever. The bleaching, however, would leave her with her natural teeth and make a dramatic change. We need to think about that.
	One negative, which I touched on during Question Time earlier and which the hon. Member for Staffordshire, Moorlands also mentioned, is oral cancer. It is distressing to see that the incidence of oral cancer has got much worse. There are more deaths, and the cure and detection rates are diminishing. A large degree of that relates to the fact that patients are no longer being seen.
	The chief dental officer was reported in the press as claiming that dentists were milking the system by asking patients to return for annual examinations. I hope that that is wrong, because the prevalence of oral cancer, particularly in deprived areas, means that it is vital that patients are seen and checked for that cancer regularly. I am referring to young people as well as those whom we normally expect to get cancer as they get on. Another point needs to be made: if a decayed molar, for example, needs to be restored, it can be restored by amalgam, composite, gold, porcelain bonded to gold or porcelain bonded to porcelain, but whatever is used, that is one fewer decayed tooth among the national population.
	We need to work to a system that introduces the private sector working alongside the NHS. I am a great supporter of NHS dentistry. I spent a lot of my career, in the early days, working in east London. We need NHS dentistry, but we need the dentists to be there for it. Taking away the drive to force them out, which the UDA targets system has introduced, might give us the chance to persuade some of those dentists to come back.
	I have a few more points to make. I hope that the Minister will think carefully when she looks at the new review. I shall cut out most of what I wanted to say and put a few basic points to her. We need to move on fluoridation. I have touched on that. Australia, New Zealand, Canada, a number of European countries and most of the states of the United States have dramatically better dental health than the UK, and that is entirely down to fluoride.
	May I suggest to the Minister that she needs to recognise a few basics? Patients need choice and they need that choice presented to them by well-trained dentists. The dentists need the appropriate equipment and materials. They need the time to produce quality work, including prevention, which the UDA targets system does not allow them. The measure of success should be the number of dentists prepared to offer core dental health treatment on the national health, not necessarily the number of people using the NHS, because that choice must be the patient's choice.

David Drew: I am delighted to take part in the debate. My remarks will be brief, because they have to be brief. I do not want to have a coughing fit. Like most Members who are present, I wish to keep my sanity and my health for the Christmas period.
	As always, it is a delight to follow the hon. Member for Mole Valley (Sir Paul Beresford), who knows much more about dentistry than I could ever want to know about it. My impression of dentistry is one of a profession going through quite dramatic change—structural change, changes to training and changes in how the profession is funded.
	My views have been formed in two particular ways. First, I have two quite close friends who are former dentists and are horrified at some of the changes that have taken place in the profession. They see themselves as good, old-fashioned NHS dentists and not in their wildest imagination could they think that, once they had left the profession, it would go from being almost comprehensively NHS to being much more dependent on the private sector.
	My second point of impact was a meeting with dentists in the Stroud area some years ago. It is the only meeting that I have had with dentists collectively because it was such a shocking experience; it is seared on my memory. This meeting pre-empted the new contract, and virtually to a person, the dentists made it absolutely clear that whatever was in the new contract introduced by the Government, it would be the baseline, and that they would negotiate on top of it. They did not see the British Dental Association as representing them; they saw themselves, more or less, as private contractors in a marketplace who would charge whatever the patient would be prepared to spend.
	That was a pretty depressing experience, because I went to the meeting to try to bring those people back into the NHS, and I learned very quickly that they were not very interested in coming back to the NHS, whatever was in the contract. This is why my constituency is so unusual, as I said when I intervened on my right hon. Friend the Member for Rother Valley (Mr. Barron) earlier. In the south of my constituency, all the dentists are NHS dentists. I have to explain to my constituents that if they live in the Stroud area, they ain't going to get an NHS dentist, but if they live in the south of the constituency, they will—unless they choose to cross over. It is a bizarre situation, and it is just like having the Berlin wall. I wish we could overcome that problem.
	It is grossly unfair that those in the north of my constituency do not have access to NHS dentistry, and dentists who operate in the south, such as Steve Clarke, who runs a big training practice, are able to make money out of the NHS. He is supportive of the NHS, and provides quality care on the NHS. I know that because I send to his practice a lot of constituents who moan to me about not being able to access an NHS dentists. Something peculiar is going on, perhaps because of the wider changes in dentistry.
	The problem with the PCT is that it measures access to NHS dentistry across my whole area, so the picture looks quite good. Of course, it depends which part of the area people live in, and those in the northern part of my constituency are strongly disadvantaged. I had that argument with the PCT, which is now putting resources into Cheltenham, Tewkesbury and the Forest of Dean, having previously put resources into Gloucester. I keep asking for resources to be put into Stroud, and it looks at the figures and says, "You've got a good number of NHS dentists in Stroud". However, that is the case only on a locational basis.
	I shall end on the issue of fairness and equity. I hope that the Government will consider that issue in the investigation that they have launched. I could go into all sorts of questions of fairness and equity with regard to orthodontistry, where those who seem to be in the right place at the right time get free treatment and other people do not. I also feel strongly about the question of what people get for what they pay. We have all dealt with difficult constituency issues where people have felt that they paid money when they were not sure what treatment they would receive. That is one of the problems of not underpinning dentistry more widely. I could speak about fluoridation, but I am clearly not among friends because I am a long-time opponent of fluoridation of the water supply, so I will say no more about it.
	In conclusion, I hope that there is a comprehensive investigation of dentistry in this country. I accept that we have not got it right, but that has been true for a long time, and we owe it to people in those deserts where there is no NHS treatment to provide greater fairness and equity. If this investigation can do that, it will have come not a second too early; too many people have lost out, and continue to lose out, which is completely unfair in this day and age.

Michael Penning: It has been a short, but excellent debate, and I apologise to hon. Members who have not had the time that they deserved— perhaps having three statements at the start of the day did not help. I know that the Chairman of the Select Committee raised that during a point of order earlier.
	I shall try to touch on some of the points raised by hon. Members this evening, starting with the Chairman of the Select Committee. I was a very proud member of the Select Committee, and we heard earlier that there were calls for an inquiry into dentistry some time ago. I agree that there were such calls, and I praise Committee members for calling for that. I also praise the Committee for the quality of the recent report, which was very fair. It is scathing in places, but it also offers forward-thinking and innovative ideas on how the contract could be progressed. I do not agree with parts of the report, however, and Her Majesty's Opposition also have some ideas on how we could make progress, to which I will return shortly.
	I was interested to hear the Chairman of the Select Committee, the right hon. Member for Rother Valley (Mr. Barron), refer to his dentist, because unless he is having treatment at the moment, he has not got a dentist as this contract does not involve registration. Therefore, unless someone is undergoing treatment, they do not have a dentist. I would have liked that to have been made clear in the report; I do not think it is generally known by the public, but it is a fundamental point of the contract, which was imposed on dentists in 2006, that people are not registered unless they are actually having treatment. That is a very important issue, because if we were to go out on to the high streets of this country and ask members of the public who rely on NHS dentistry whether or not they are registered with a dentist, the vast majority would still say they were even though they are not. They might turn up at the dentist and say, "I need treatment", but that dentist might have already run out of UDAs; that dentist might already have said, "I can't treat any more patients this year." Those are the circumstances when some of the problems are occurring.

Andrew Murrison: Does my hon. Friend not agree that one of the most powerful ways of incentivising dentists is to register patients, as they would then have an incentive to build up a list of people with good oral health, which would ultimately reduce their work load? That aspect of incentivisation has been completely missed in this new contract.

Michael Penning: I completely agree with my hon. Friend and I will come on to that point later. I do not see how we can have preventive dentistry without having some form of capitation and registration. I think the right hon. Member for Rother Valley alluded to that in his speech.
	The report digs deeply into what NHS dentistry is capable of doing in this country today. Should we actually give up on parts of the country that rely on NHS dentistry? There is a postcode lottery; it is a fact that in some parts of the country that I have visited there is a plethora of NHS dentistry. In Newcastle and the north-east there is almost no private dentistry, whereas in other parts of this country—I am referring to England now—there is almost no NHS dentistry. This is a national health service, however, and that is partly—although not completely—why this contract was created. It was already in difficulties before, which is why the Government, in good faith, tried to bring in a contract that would help, but instead it has made the situation worse.
	When the Select Committee took its evidence, about 900,000 people who had had NHS dentistry had lost it. The latest figure is 1.2 million. That means there are now 3 million people in this country who need to rely on NHS dentistry but cannot access it. As the economic climate becomes increasingly difficult, more people will need to rely on NHS dentistry. I listened carefully to the comments of the hon. Member for North Norfolk (Norman Lamb) when he said he is in Denplan. A lot of people who are in Denplan will not be able to continue to afford to make those monthly payments should they lose or change their job. The demands on NHS dentistry will, therefore, increase.
	We must look at what the Government might propose in the review. My personal view is that this contract is a damaged brand, with its language of UDAs. From meeting dentists around the country, it is clear that they are not confident that the contract can provide for the British people the sort of dentistry we expect in the 21st century. I therefore look forward to the review with a degree of scepticism in terms of where the contract can go.

Sandra Gidley: The panel undertaking the review has been welcomed, but I note that it contains no community dentist and so some dentists will be wondering about its composition. It seems to be made up of a couple of academics, somebody who apparently wants to be the chief dental officer one day and a failed commissioner who commissioned dental services without doing a needs assessment. Does that augur well for the future?

Michael Penning: No, it does not. In fact, it resembles something similar to what happened when this contract was imposed in 2006.
	Lots of hon. Members have discussed the importance of proper continuity and discussion with the professionals in the dentistry profession. As has been mentioned, no one body represents the whole of dentistry and the dentistry profession—perhaps it would be better for the dentists if they did have one body that could stand up and fight their corner. I am very concerned that there appears to be a lack of engagement between Ministers and the professionals.
	I did not intend to upset the Minister at Health questions earlier today, but I clearly did so. Let me therefore go back for a second to where we were. I asked why no Minister went to the British Dental Association conference in Manchester this year to speak on behalf of the Government, given that the contract is so controversial within the profession. The Liberal Democrat spokesman was there, I was there and so, too, was the chief dental officer. He is a civil servant—he is not a Minister of the Crown and he is not elected; he is appointed by the Secretary of State for Health—and it is fundamentally unfair that a civil servant is there to represent the mistakes and problems that the Government have got themselves into on dentistry. Both the Liberal Democrat spokesman and I refused to debate with him in public, although I would have been more than happy to have debated with a Minister.
	I understand that the Minister was busy that day, but I was with a Health Minister on the train to Manchester—the hon. Member for Bury, South (Mr. Lewis) was a Health Minister at the time. I said to him, "Fantastic, you are obviously coming to the BDA conference to represent the Government." He replied, "No, I am going home." The only person who was representing the Government was the chief dental officer, and that was fundamentally unfair on him, because he was put in a position that only an elected Minister should be put in.
	As the process goes on and as this contract is reviewed, I am very concerned about whether the Government will have the courage to admit how much of the contract they have got wrong and how much of it has affected people in this country. We see reports in the press of people extracting their teeth with pliers and people going to the pharmacists to get do-it-yourself fillings, which are available in most pharmacists in this country, because of the lack of NHS dentistry. That might be down to fear; it may not be fact, but the perception of a lack of such dentistry exists.
	We have discussed the UDAs at length today. It cannot be right that in band 2 up to six fillings or one root canal or an extraction can be carried out. The obvious situation to consider is that of a dentist who is under pressure. What is such a dentist going to do? I hope that all dentists do what is right for the patient, but given that they are looking at the UDA rather than at the outcomes, it is obvious that, at times, real problems will arise. Many dentists have said that they are not willing to work under this contract and they have walked away, and we have to encourage them to come back.
	One area of the report that concerned me—this issue came up when I was on the Select Committee and we were examining charging—was the bit dealing with dentists who say "I will keep your children on only if you take me on as a private dentist." Such an approach is fundamentally wrong, because it is blackmailing people by saying that they can have NHS dentistry only if they pay for a private insurance plan or they pay as they go. I think that we have to accept the fact that, there is nothing because so few dentists have been working in some parts of this country, at this stage wrong with a dentist who is willing to take on a child, with no strings attached, under an NHS contract. That is better than nothing, and we need to examine such an approach. I know that the Select Committee was concerned about people being pressurised into certain things. That is fundamentally wrong, but if we can encourage private dentists to come back into NHS dentistry and take children on without any strings attached, that has to be good. On average, children have 1.5 fillings or extractions by the age of five, so the oral hygiene of our youngsters is going in the wrong direction. If we do not address children's oral health problems, that will have an effect as they get older. It is therefore vital to address the issue of oral health in the young.
	We have to encourage more dentists to come back into NHS dentistry. We have to look seriously at the court case earlier this week, which the Government lost on appeal when a dentist objected to the fact that, whether he had performed well or poorly, the PCT could remove his contract at any time. The courts ruled that that was wrong. We should extend the length of contracts, so that dentists can invest in their practices. PCTs do not pay for surgeries or equipment: the investment has to be made by the dentists themselves. There must also be a presumption that should a dentist want to move on or retire, they have the right to sell on the goodwill in their contract. If we want dentists to come back into the NHS, or young dentists coming out of training schools—I have visited them and they are fantastic—to come into the NHS, we must give them the confidence to do so, especially in this difficult economic climate.
	I agree completely with the Committee: if we want to understand what is happening to dental hygiene in this country, we have to have registration and a per capita system; otherwise, we will not have a national health service. Instead, we will have the postcode lottery that has put NHS dentistry into crisis today. I welcome the report and I congratulate the Committee on it.

Ann Keen: I welcome the opportunity to speak on the important subject of dental services. I will do my best in the time available to respond to the points made in the debate. I start with my right hon. Friend the Member for Rother Valley (Mr. Barron), who made his contribution as Chairman of the Committee. He mentioned training and how it affects dentists in practice. The review by Professor Jimmy Steele, which we welcome, will cover those areas.
	My hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) was an absolute trouper during her speech, and we certainly witnessed her commitment to dentistry this evening. I congratulate TLC 4 Smiles, which obviously gave her the courage and commitment to continue. I thank her for her contribution and the work that she and other hon. Members have done to push dentistry to the forefront.
	Many hon. Members talked about the importance of oral health care, and the hon. Member for Mole Valley (Sir Paul Beresford) raised the important issue of oral cancer. I am sure that he would agree that the Government's approach to children and the purchase of tobacco, and the discouragement of cigarette smoking, is important, because reducing smoking is one of the most important elements of addressing oral cancer.

Michael Penning: With that in mind, will the Minister consider whether dentists should be allowed to prescribe nicotine replacement therapy?

Ann Keen: We should consider all aspects of smoking cessation.
	People's oral health has changed, and dentistry needed to change to reflect that. Dentists themselves recognised that the old contract was a so-called "drill and fill treadmill". Under that contract, dentists themselves chose where to set up in practice, they chose how much NHS work to do, and if they chose to leave the NHS, there was nothing that the local NHS could do to protect local access. As the Committee and many Members have pointed out, it is access that is important. Our new contracts give local primary care trusts the power to decide what services they need. Local PCTs contract with dentists to provide those services.

Peter Bone: The Minister describes the problem in great detail, but the fact is that it has got worse. Since 1997, 15 per cent. fewer adults are being seen by an NHS dentist. The Government's policy has totally failed.

Ann Keen: If the hon. Gentleman will let me proceed with the points that I want to make, he will see that some aspects of the contract have without question improved things for patients. There are difficulties, which we have recognised.
	If a dentist decides to leave the NHS, the PCT can commission new services to maintain and grow NHS access. The fundamental principles of the new dental contract are right. It allows prevention as well as traditional dental treatment and allows the local NHS to commission local services to meet local needs.

Sandra Gidley: Will the Minister explain why it takes so long to commission new services? It takes more than a year to do so locally. At the beginning of the process, the commissioners did not even know how many dentists the UDAs would commission. The level of knowledge was that low. What is being done to address that and to speed up the process so that people do not lose out?

Ann Keen: The hon. Lady will be aware that those on her Front Bench have said how good the situation is in certain parts of the country, and particularly in Birmingham. There are many good practices that can be considered and we want to encourage the commissioners to do that.
	The new contract was a radical change. In its report, the Health Committee identified concerns about the way in which it works. That is why we have asked an independent team, led by Professor Jimmy Steele of Newcastle university, to carry out the review. The review will help us to determine how we can use local commissioning to increase access to NHS dentists and improve the quality of services.

Paul Beresford: Let me take the Minister back to the previous intervention. Does she not agree that many PCTs are using the extra commissioning money to cover the loss of fees from patients?

Ann Keen: If the hon. Gentleman would like to give me information about where that is happening, I would be very happy to look at it. PCTs have the money ring-fenced until 2011 and they are encouraged. We have to congratulate many dentists and PCTs on the work that they have done to see that the contract works to the benefit of all our constituents and all patients who require dental services.
	The review will help us to determine how we can use local commissioning to increase access to NHS dentists and to improve the quality of services. It will investigate whether the decline in complex treatment is consistent with the needs of patients. It will help us to understand what more we can do to encourage prevention and reduce inequalities in oral health. The review will look forward to help us begin to plan the dental services we will need to meet peoples' needs in the future.

Greg Mulholland: Will the Minister consider putting a dentist on the review panel? May I also briefly bring her back to the key issue of access, which I am not sure that she has quite covered? I remind her that, in 2007, the Department said that the key test of its reforms would be
	"their ability to support improved patient access".
	Despite that, 20,000 fewer patients are accessing NHS dentistry in Leeds, and 900,000 fewer have done so across the country in the past two years. How can the Minister possibly defend the contract in terms of access? When will she accept that it has failed in that aim and that the review must fundamentally address that point?

Ann Keen: I will not accept that at all. Many Members have said to me, both inside and outside the Chamber, that dental care has improved. In fairness, hon. Members need to recognise that the problems of dental access date back to the early 1990s. The problem had been growing for many years and culminated in the famous queue in Scarborough. That was probably the first time that the nation's attention was focused on a system that was badly in need of reform.
	I ask the House to remember that the queue in Scarborough occurred in January 2004, more than two years before we introduced our contract reforms. Indeed, it demonstrated the need for them. On top of the problems with the old contract that I have already described, we had a shortage of dentists. We have now opened two new dental schools and increased the total number of dental undergraduates in training by 25 per cent. The first of those new graduates will leave dental school next year, and the recurring increase in dental graduates will transform the availability of dentists. I hope that hon. Members of all parties will listen to what I am saying and be honest enough to accept that, although a decision was taken under the previous Administration to close two dental schools, we have now put that right. Does the hon. Member for Hemel Hempstead (Mike Penning) want to intervene to accept that the Conservatives closed the schools, and that we have put that right?

Andrew Murrison: Does the Minister accept that those closures were predicated on projections about the reduction in dental care made by the profession at the time? I am sure that she likes to adhere to the evidence base, so she will know that many dentists, because of the changes to dentistry, have been drawn to cosmetic dental surgery. That was not expected, and she should acknowledge that both those factors are part of the problem that we face today. Will she acknowledge that it is wrong of her to lay into previous Governments for adhering to the evidence base that underpinned those closures?

Ann Keen: The fact remains that two dental schools were closed under the previous Administration, and that they have been opened by the present Government.
	As I said, the new contract is based on dental services locally commissioned by PCTs to meet the needs of people seeking care in their areas. We have shown our commitment to increasing access to NHS dental services by increased investment of 11 per cent. in the current year. Next year, we will invest a further 8.5 per cent., for a total increase of £385 million over the two years.
	We have reinforced that commitment in the NHS operating framework for 2009 by stating that PCTs should aim to provide access for anyone who seeks help in accessing NHS dentistry. In 2006, a significant number of dentists chose not to accept their new contracts. The level of service that they represented was 3.6 per cent. and, in patient terms, that was the equivalent of services for around 1 million patients. This loss is still reflected in the 24-month access data published by the information centre.
	The number of dentists providing NHS treatment in 2007-08 increased by 655. So although the dentists who refused the new contracts in 2006 were lost, the number of dentists has started to grow again. The number of courses of treatment delivered in 2007-08 was 2.7 per cent. higher than in 2006-07, and the figures that the information centre published in November show that courses of treatment delivered in the first quarter of the current year are on course to be 3 per cent. higher.
	Looking forward, the figures show that PCTs this year have commissioned more dental services than ever. This increase in activity will show in the access data very soon, but locally it is already visible in the form of new practices opening and of existing contracts being grown.
	Despite the national figures, many PCTs are already ahead of the game. Some 30 per cent. of PCTs have actually increased dental access from March 2006. Some have done very well. The Isle of Wight, for example, has increased dental access by 24 per cent., while both the Medway and the Telford and Wrekin PCTs have increased it by 17 per cent. Those figures hardly support the view that the new contract somehow causes access to reduce, but I accept that other PCTs need to move further and faster on access. The new commitment in the operating framework gives PCTs a clear signal as to the priority that we place on access.
	In my constituency, dentists have developed and run an outreach project to apply fluoride varnishes to children's teeth to protect them from decay. At the same time, they have put the parents in touch with local dental services. There are many other examples around the country of similar initiatives that can be carried out as part of the contract.
	The Select Committee was told to expect a mass exodus from the NHS in April 2009. We do not see any sign of that, although some practices that previously have employed a restricted contract approach to their NHS commitment may find that the PCT proposes a contract value that more properly reflects its commitment to the NHS. Such practices tend to offer child-only contracts, or contracts for exempt patients only.
	In conclusion, the past three or four years have been turbulent and unsettling. We now need to move forward with the profession, using the increased investment and larger work force as part of a greater focus on providing NHS dental services that we can be proud of.
	I am proud of our NHS dentists; they work hard. They have worked hard for all of us, with a difficult contract. We will make sure that the evidence from our review, and the evidence in the Health Committee report, which my Department welcomes, will continue to strengthen access to dentistry in all our constituencies.
	 Debate interrupted, and Question deferred (Standing Order No. 54(4)).
	 The Speaker put the deferred Questions (Standing Order No. 54(5)).

Vote on account, 2009-10
	 — 
	Office of Gas and Electricity Markets

Resolved,
	That, for the year ending with 31 March 2010, for expenditure by the Office of Gas and Electricity Markets—
	(1) resources, not exceeding £315,000, be authorised, on account, for use as set out in HC 1039 of Session 2007-08, and
	(2) a sum, not exceeding £700,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs as so set out.

Department of Health

Resolved,
	That, for the year ending with 31 March 2010, for expenditure by the Department of Health—
	(1) resources, not exceeding £33,990,717,000, be authorised, on account, for use as set out in HC 1039 of Session 2007-08, and
	(2) a sum, not exceeding £33,474,467,000, be granted to Her Majesty out of theConsolidated Fund, on account, to meet the costs as so set out.
	 The Speaker then put the Questions on the outstanding Estimates (Standing Order No. 55).

Supplementary Estimates, 2008-09

Resolved,
	That, for the year ending with 31 March 2009—
	(1) further resources, not exceeding £7,425,726,000, be authorised for use for defence and civil services as set out in HC 1163 of Session 2007-08,
	(2) a further sum, not exceeding £32,112,484,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs of defence and civil services as so set out, and
	(3) limits as so set out be set on appropriations in aid.—  (Ian Lucas.)

Estimates, 2009-10 (Vote on Account)

Resolved,
	That, for the year ending with 31 March 2010—
	(1) resources, not exceeding £168,435,164,000, be authorised, on account, for use for defence and civil services as set out in HC 1039, HC 1136, HC 1160 and HC 1171, of Session 2007-08, and
	(2) a sum, not exceeding £160,963,839,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs of defence and civil services as so set out.— (Ian Lucas.)
	 Ordered, That a Bill be brought in upon the foregoing Resolutions;
	That the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Yvette Cooper, Mr. Stephen Timms Angela Eagle, Ian Pearson and introduce the Bill.

Consolidated Fund Bill

Presentation and First Reading
	Mr. Stephen Timms accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31 March 2009 and 31 March 2010 and to apply certain sums out of the Consolidated Fund to the service of the years ending with 31 March 2009 and 31 March 2010.
	 Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 5).

William Cash: On a point of order, Mr. Speaker, regarding the statement made by Assistant Commissioner Mr. Bob Quick on the entry into the House of Commons and the arrest of my hon. Friend the Member for Ashford (Damian Green). The statement, we are told, recognises parliamentary rights and freedoms, but we are also told that a report exists. I have written to you, asking whether you would be kind enough to demand and/or ask the person who produced the report—Chief Constable Johnston of the British Transport police—to make it available and put it in the House of Commons.
	The statement that we have been provided with welcomes the assurance of Chief Constable Ian Johnston
	"that the arrests and searches were lawful."
	Irrespective of whether the arrest was lawful, on which I make no comment, the question of whether the searches were lawful is a matter of privilege for the House. The statement asserts that they were lawful, but that is a matter of grave dispute. It is well established that the question of whether a privilege exists is one for the courts. It is for the House to decide whether there has been an infringement. I therefore regard the matter as being within the framework of the complaint of privilege that I have already made to you. I would be grateful if you considered the matter and made appropriate representations, so that we can have a copy of the report; otherwise, there would, I believe, be a breach of privilege.

Richard Bacon: Further to that point of order—

Mr. Speaker: Perhaps I might reply to the hon. Member for Stone (Mr. Cash). As I came downstairs this evening to take the Chair, I learned of the statement that was made. It is my understanding that the Johnston report will not be published until criminal proceedings are dealt with. Therefore, there has been no publication of the report, and the situation is as it stood this afternoon, when I replied to the hon. Gentleman to say that I was not going to allow a debate.

William Cash: Further to that statement, if I may, Mr. Speaker. This is very important. The question of whether article 9 of the Bill of Rights provides for the Police and Criminal Evidence Act 1984 to be overridden by that article in proceedings in Parliament is the question before the House. The complaint of privilege that I have made effectively states, as you know, Mr. Speaker, that article 9 overrides PACE in respect of the precincts of the House. That is a matter on which the Standards and Privileges Committee must adjudicate in due course if a motion is passed. I believe that that is the position, if I may say so with respect, Mr. Speaker.

Richard Bacon: rose—

Mr. Speaker: I will take a point of order from the hon. Gentleman.

Richard Bacon: I am grateful, Mr. Speaker. Further to the point of order from my hon. Friend the Member for Stone (Mr. Cash). The final review document by Chief Constable Ian Johnston is a review of the behaviour of the police, contrary to the statement of Assistant Commissioner Quick published this evening, which says:
	"As is normal with such reviews, it cannot be published at this time as it relates to an ongoing criminal investigation".
	It does not relate to such an investigation, but to the behaviour of police officers. May I therefore ask you, Mr. Speaker, to reflect—overnight, perhaps—on whether you could consider later in the week, before the House rises for the recess, insisting to the police that the review document, which is now in its final form, be made available to hon. Members?

Mr. Speaker: The hon. Gentleman has almost taken the words out of my mouth. He has raised an important matter, and the hon. Member for Stone has raised a point of order, too. As I have stated, I have just come down to chair proceedings, as is traditional for me, to see the last piece of business out before the evening is over. It is best that I take the points of order that both hon. Gentlemen have raised, consider them overnight, and take advice from my advisers and allow the night's business to proceed. I promise that I will come back to the House as soon as I possibly can on this matter, and of course that will be before the week is out. I thank the hon. Gentlemen for raising their points of order.

Business without Debate
	 — 
	Delegated Legislation

Mr. Speaker: If it is convenient for the House, we shall take motions 4 to 8 together.
	 Motion made, and Question put forthwith (Standing Order No. 118(6)),

Defence

That the draft Armed Forces (Alignment of Service Discipline Acts) (No. 2) Order 2008, which was laid before this House on 21 October, in the previous Session of Parliament, be approved.

Banks and Banking

That the draft Kaupthing Singer & Friedlander Limited (Determination of Compensation) Order 2008, which was laid before this House on 3 December, be approved.
	That the draft Heritable Bank plc (Determination of Compensation) Order 2008, which was laid before this House on 3 December, be approved.
	That the draft Bradford and Bingley plc Compensation Scheme Order 2008, which was laid before this House on 3 December, be approved.

Rehabilitation of Offenders

That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2008, which was laid before this House on 29 October, in the previous Session of Parliament, be approved. —( Ian Lucas.)
	 Question agreed to.

Regulatory Reform

Motion made, and Question put forthwith (Standing Order No. 18(1)),
	That the draft Legislative Reform (Verification of Weighing and Measuring Equipment) Order 2008, which was laid before this House on 20 October, in the previous Session of Parliament, be approved.— (Ian Lucas.)
	 Question agreed to.

Adjournment (Christmas)

Motion made, and Question put forthwith (Standing Order No. 25),
	That this House, at its rising on Thursday 18 December, do adjourn till Monday 12 January 2009.— (Ian Lucas.)
	 The Speaker's opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 17 December (Standing Order No. 41A).

PETITIONS

Northern Rock

Fraser Kemp: I wish to present a petition submitted by my constituent, Linda Lewis, and signed by 73 other constituents who are shareholders and supporters of Northern Rock. The petition calls for the reassessment of the terms of reference given to the valuer appointed to deal with Northern Rock. I hereby submit the petition.
	 Following is the full text of the petition:
	 [The Petition of small shareholders & supporters of Northern rock of the Houghton and Washington East constituency in the North East of England,
	 Declares that that it welcomes the acknowledgement by the Government that it must pay compensation for nationalising Northern Rock plc, but that the terms of reference for the valuation of the shares are wrongly based as the company was not in administration and was still a 'going concern'.
	 Further declares that if these terms are unchanged there will not be a fair compensation payment which will lead to many in our region having their savings and pensions undermined which in turn will have a negative impact on the North East's economy.
	 The Petitioners therefore request that the House of Commons calls on the Government to reconsider the terms of reference given to the valuer so that he can fully reflect the true value of Northern Rock shares.
	 And the Petitioners remain, etc.]
	[P000300]

Planning and Development (Northamptonshire)

Peter Bone: Before I present the petition, may I wish you a happy Christmas, Mr. Speaker, as I think that this is my last opportunity to do so this year? Thank you for all your help during the whole year for the whole House.
	The petition is from the residents of Higham Ferrers. Last Friday, I went to a school there that has a problem with safety, as the petition makes clear:
	The Humble Petition of residents of Higham Ferrers in the Wellingborough constituency and the surrounding area,
	Sheweth
	That major concern is expressed about proposed developments near to Higham Ferrers Nursery and Infant School and Higham Ferrers Junior School which will pose a risk to the children attending these schools. Increased traffic along the adjacent service road will pose a threat to children and parents, who use this road as a safe area for both the dropping off and picking up of children. In addition many children use this road during the day as an access route to and from the school especially to the sports facilities. Hundreds of children will be affected by the proposed developments.
	Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Children, Schools and Families to liaise with East Northamptonshire District Council and Northamptonshire County Council to ensure a safe environment for children using the schools.
	And your Petitioners, as in duty bound, will ever pray, &c.
	[P000302]

TEACHERS AND PUPILS (PHYSICAL CONTACT)

Motion made, and Question proposed, That this House do now adjourn. —(Ian Lucas.)

Norman Baker: I am grateful for the opportunity to raise in an Adjournment debate what I regard as an important matter. It arises from the oral exchange that took place on 30 June between myself and the Secretary of State for Children, Schools and Families, following my giving him a couple of examples of physical contact issues relating to teachers and children in their schools.
	Let me reprise those examples briefly. One instance involved a little girl who had fallen over and injured herself in the playground and was clearly distressed, but the teacher felt unable to put her arm around her and comfort her as she would like to have done. For the child in question, that was a distressing and inexplicable situation. Someone whom she regarded as effectively a surrogate parent in the school situation was not comforting her, as she would have expected. The second instance, which is rather different, occurred when a young lad who was causing some difficulties for his teacher put himself under a desk in the school and refused to come out. The teacher felt unable to remove the child from under the desk. There he remained until his parents were called, completely disrupting the education of the rest of the class.
	The Secretary of State for Children, Schools and Families said in reply:
	"The common-sense thing would be for the hon. Gentleman to advise that school that there is no reason at all not to provide such comfort and support—whether the issue is about reasonable restraint or comfort. Of course teachers should be comforting children. Rather than raise the matter with me, the hon. Gentleman should go back to the school and tell its staff that they should have given that comfort and that they should do so in future."—[ Official Report, 30 June 2008; Vol. 478, c. 588.]
	That was the answer from the Minister's colleague, so I went back not just to that school, but all local schools to test whether those were isolated incidents or whether there was a more general problem. I wrote—in neutral terms, I assure the Minister—to all the schools in my constituency to ask about the matter and whether they thought there was a problem. Not all the schools replied, but 90 per cent. of those that responded indicated that they felt there was a problem, and gave me further instances of how that problem manifested itself. The Minister will understand that it is not sensible to reveal the names of the schools here, but if she wishes to have those names, I am happy to provide them subsequently.
	One primary school head teacher wrote to me:
	"We have the children for many hours a day and often have to pick up the pieces when there are bereavements, parental arguments/separations/divorces that affect the children deeply. Many children trust us implicitly and to not be able to comfort a child is distressing for all concerned. Many teachers have said that they have refrained from contact due to the fear of unfounded allegations being made."
	Another primary school head teacher wrote:
	"Children have become aware of this issue and on some occasions put additional pressures on staff. We had at least four occasions in the last academic year when older children have told members of staff, 'You can't touch me', and, 'If you touch me, I'll tell my mum and she'll get you sacked', and even on one occasion"—
	this is the head teacher himself who was told this by a rude and defiant 11-year-old—that was his description—
	"that if I kept him in at lunch time, he would tell his mum that I'd hurt him."
	One secondary school head teacher wrote:
	"The nature of investigations"
	into assault allegations by children
	"give the impression to others that staff are guilty",
	because they are immediately suspended. The head teacher went on:
	"Investigations can be long and tortuous; even when teachers are shown to be innocent after a long investigation, some mud sticks and their reputation may not fully recover—it is probably impossible to return to work unscathed by the experience."
	I stress to the Minister that those are the words of head teachers. Another secondary head teacher wrote this:
	"I asked a student, who had misbehaved, to leave a corridor. He made no effort to comply. I placed a hand on the back of his shoulder to guide him out of a door to which he responded by immediately phoning the police on his mobile telling them that he had been assaulted by the headteacher. Luckily for me there were many witnesses present."
	There is a problem here that needs to be addressed. Another head talked about students who
	"exploit teachers' vulnerabilities which undermines discipline."
	Another said:
	"This is an important issue and Ed Balls's answer"—
	I quoted that to the Minister earlier—
	"does not address the very real dilemma faced by teachers."
	Ninety per cent. of respondents indicated that there had been such incidents in their own schools and they were happy to relay them and explain in detail what had happened on individual occasions. All of them said that there had been occasions when they believed that children had made unfounded allegations just to cause difficulties for the teacher, and all said that, had it not been for CCTV or witnesses who happened to be nearby, there would have been serious difficulty in refuting some of the allegations. Another head teacher said:
	"I strongly agree that teachers refrain from contact, even when it may be appropriate, for fear of allegations."
	I hope that the Minister accepts that there is a problem.
	At this point, I should say that I am grateful to my local evening paper,  The Argus, which has been very supportive of my campaign. In fact, it ran an editorial about how classroom disruption—it was referring to the lad under the table—
	"puts the brake on everybody's progress."
	It went on:
	"When lessons are interrupted, all our children are learning is how much they can get away with."
	That is a genuine concern; what we are talking about is not only protecting teachers, which is appropriate anyway, but protecting the children who behave properly, as most children do. They want to learn, but see the odd child misbehaving and getting away with it. I am not clear what message that gives, but I am sure that it is not appropriate.
	I have raised the issue in writing subsequently with the Minister's colleagues. On 23 October, I had a reply from Baroness Morgan, who is in the Minister's Department. She said that revised guidance on the use of force to control or restrain pupils had been issued in November 2007; no doubt the Minister will refer to that. I have looked at that guidance, and let me say quite honestly that there is nothing particularly wrong with it; it is sensible and strikes the right balance.
	I have also looked at the extensive physical contact guidance for school and other education staff offered by my own local authority, East Sussex county council. It is a big document, which all schools in my area have been given. Again, I do not have a problem with the content; the issue appears to be that the guidance itself is not enough. Notwithstanding the fact that the guidance may be sound, it is clear that teachers are not happy following it for fear of unfounded allegations. When such allegations are made, it seems that teachers are regarded almost as guilty until proven innocent; they are often suspended and have a cloud hanging over them. As a consequence, common-sense, sensible physical contacts, which in a logical world all of us would wish to see—comforting a child who has hurt herself, dealing with a child who is disrupting the whole class—are not being carried out, notwithstanding the guidance that would support such contact, because teachers are afraid of the consequences of following the guidance.
	I want to draw that particular issue to the Minister's attention. I am not criticising the guidelines or the Government, but saying that there is a problem with teachers, who, from the evidence that I have seen, do not have confidence that if they follow the guidelines they will be supported in the event of being challenged. One of the ways to tackle the issue is for the Government to make it absolutely clear that when teachers are in the classroom or school, they are effectively in loco parentis.
	The Minister may say that that is the position, but the reality is that in the case of the boy under the desk the teacher would not remove him but the parents were called to do so. In that teacher's mind, there was a difference between the power that he was able to exercise legally, or wisely, and the power that the parents could exercise. There should not be a distinction in those matters. The teacher should have the same responsibilities and powers as the parents when the children are in school. I am interested to know whether the Minister can confirm that that is the case and, if so, what she will do to reinforce it through guidance and information to our teachers.
	The next issue is what happens when an allegation is made. I suppose that there are a minority of occasions when the allegation is well founded; one cannot deny that that may be so. However, I am absolutely sure that the majority of allegations made against teachers are not well founded, and in those circumstances it is wrong for teachers to be suspended and to have a cloud hanging over them while investigations take place and the police are called. I have lots of examples for the Minister of where the police have been called and have turned up and questioned teachers at great length. Let us think about the power trip that children are given when they call in the police and have teachers held before them answering questions—what an attractive proposition that is for certain young minds. That is inappropriate. There must be an assumption that, unless there is very clear evidence to the contrary, a teacher is probably innocent and should be allowed to carry on in their work. Obviously, if someone has witnessed something horrendous, that is a different situation, but in most cases a teacher should be presumed to be innocent and allowed to carry on. Children should not be given the power to have the teacher suspended or subjected to police investigation, sometimes very overtly.
	I am concerned that we do not collectively do enough to support our teachers. I have encountered examples in my constituency—it is a law-abiding constituency, so if it is happening there it is happening elsewhere—of what sometimes happens when a teacher attempts to enforce discipline in a way that all of us in this House would think entirely appropriate. When they keep a child in for detention, the parents arrive and attack the teacher, sometimes physically, and sometimes in front of the children. There is a real problem with a minority of parents who, on occasion, do not support the teachers. I do not know what the answer is, I freely confess, but I recognise the problem, and we have to try to deal with it. If the Minister has something helpful to say, it would be very welcome.
	Finally, I want to draw attention to an unfortunate compensation culture within our schools, which is part of the same problem. This is from an article in  The Argus headed "£80,000 bill for Sussex school injuries":
	"A ten-year-old boy who pulled his hamstring at school was awarded more than £6,500 in compensation...Another pupil was given £4,200 for slipping on ice in the playground".
	That kind of arrangement is not appropriate in our schools. All of us, when we were at school, went out in the playground, and no doubt we all slipped over on ice at some point. It is not appropriate to sue schools or for them to pay out £4,200. If we get to a situation whereby the children feel that they have power over the teacher in terms of the police and allegations that they can make, and power over the local authority in terms of being able to sue for costs, no doubt through their parents, we are creating a society full of people who have unrealistic expectations and will not adjust properly to the real world when they get outside school.
	Not only in the interests of teachers, but in the interests of children, we need to do more than we have done. The Government have got their guidance right—I do not criticise them about that—but there is a problem, and if the Minister has some sensible suggestions to make I would be very pleased to hear them.

Sarah McCarthy-Fry: I congratulate the hon. Member for Lewes (Norman Baker) on securing this debate. It is obvious from exchanges in the House and correspondence that has been exchanged with the Department that he feels very strongly about the matter.
	We want to ensure that every child has the best possible education and experience of childhood. They should not only have a world-class standard of education but feel happy, comfortable and secure at school. School should be a sanctuary where young people learn, confident in the knowledge that they will be safe, secure and looked after. Pastoral care in schools is extremely important. In that sense, it is entirely appropriate for teachers to be figures whom children can look up to, both for guidance and comfort and as guardians, while they are in schools. The example that the hon. Gentleman outlined in his exchange with my right hon. Friend the Secretary of State, where a child had fallen over in the playground, is a case in point.
	Clearly teachers should be able to comfort a child if they are distressed, as the teacher is the natural person for a child to turn to when they are at school. We can understand teachers' worries, but common sense must be applied. If a pattern emerges or if touching a child is gratuitous, clearly that is wrong. It is also risky to attribute being tactile to a personal teaching style or a way of relating to pupils. However, if a child is distressed, a teacher should be able to feel as though they can take reasonable steps to comfort them. The same applies if children are misbehaving.
	School staff who supervise pupils have the statutory power to use force to prevent injury, damage to property or serious breaches of school discipline. If the risks posed by the child leave no viable alternative, teachers will in some cases need to use restraint. The teacher will need to exercise their judgment. Powers exist under the legislation covering the use of force and the power to discipline to enable teachers to take what action is necessary to maintain good order and the safety of themselves, other staff and pupils. The legislation has existed in its current form since 1998 and was re-enacted by section 93 of the Education and Inspections Act 2006.
	On the whole, our teachers exercise good sense and judgment when dealing with such issues. There are only a small number of allegations of staff using excessive force—around 2,500 a year in a sector of well over 10 million students and 1 million staff. About 6 per cent. of all allegations are referred to the Crown Prosecution Service. But of course, any instance of excessive force or abuse is one too many and we must do everything that we can to guard against it. We want to make the recording and reporting of such incidents a statutory requirement for schools, so that there is a clear account of what happened, in order to protect pupils and teachers and so that parents are fully informed. We intend to legislate for that in our fourth Session education and skills Bill. Perhaps the hon. Gentleman will be a member of the Committee that considers that Bill, when we can explore those issues further.
	I know that some have concerns that teachers will be left exposed to allegations and I am acutely aware of the devastating effects that false accusations can have on a person's career, family and health. However, those risks must be balanced against ensuring that children are safe in school. That is why we have rigorous checks for those working with children, from the earliest years right through school.
	As the hon. Gentleman said, when allegations arise, it is important that they are dealt with as quickly, fairly and professionally as possible. We have been working on how to improve the handling of allegations, and in 2005 we issued guidance on how to handle cases in a more consistent and timely way. To support teachers further and to reduce the chance of such situations arising in the first place, we have published guidance to help clarify their position in circumstances that might call for physical contact.
	We made it clear in the guidance that we issued in 2007, in "Safeguarding Children and Safer Recruitment in Education", that
	"It is not realistic to suggest that teachers should never touch pupils".
	We issued revised guidance in 2007, entitled "The Use of Force to Control or Restrain Pupils", that includes many of the principles and much of the advice originally set out in the circulars for special schools. Non-statutory guidance, contained in "Safer Working Practice for Adults who Work with Children and Young People", was refreshed by our network of allegations management advisers in November last year. That guidance states:
	"There are...occasions when it is entirely appropriate for...adults to have some physical contact with the child or young person with whom they are working."
	It also notes that
	"an action that is appropriate with one child in one set of circumstances may be inappropriate in another, or with a different child. Adults...should use their professional judgement at all times".
	The Department's TeacherNet gives more direct advice to teachers to help them to develop that judgment, better assess difficult situations and make the right choices. The guidance deals with providing comfort to children, which has been mentioned, and states:
	"There may be occasions where a distressed pupil needs comfort and reassurance which may include physical comforting such as a caring parent would give."
	It also covers the use of physical restraint and a range of related issues: dealing with complaints and allegations, post-incident support, staff training, and reducing the risk of such situations arising in the first place.
	All our guidance is supported by specialist publications that discuss more specific issues, such as dealing with pupils who display extreme behaviour relating to a disability, and the use of physical intervention for pupils with severe behavioural difficulties. We plan to consolidate all our guidance on the use of force or physical interventions by school staff into a single document next year. When we have our consultations with our social partners, I shall try to establish whether we can work to ensure that teachers are able to act with confidence.

Norman Baker: The Minister has referred to a welter of guidance. It all seems very sensible, and I think that the consolidation into a single document will be useful, but the essential problem—which I have identified—is that, notwithstanding the sensible guidance, large numbers of teachers apparently do not feel able to act on it. Has the Minister any idea how to surmount that problem?

Sarah McCarthy-Fry: I should like to begin by exploring the research that the hon. Gentleman has done in his constituency. I must say that I have not heard of large numbers of teachers not feeling able to act on the guidance in other parts of the country, and we may need to establish whether that is the case. It is certainly unlikely that it is an isolated incidence, confined to the hon. Gentleman's constituency, but I should also say that when I contacted representatives of his local authority they said that they were not aware of any problems. Perhaps we simply need to bring the issue out into the open.
	Our single document will take into account conclusions from the review of restraint in secure settings for children and young people, which will be published shortly. However, we are also focusing on the need to help pupils to manage conflict and resolve disputes themselves before they reach the point at which teachers must be involved.
	The new secondary curriculum places a broader focus on emotional health and well-being, and allows more time for learning those wider skills. Programmes such as SEAL—social and emotional aspects of learning—are creating a whole-school approach to harmonious learning. That programme is fostering better relationships between pupils and teachers, helping students to recognise and manage anger and conflict in an appropriate way and to understand the feelings and points of view of others.
	We also propose to make personal, social and health education a statutory part of the curriculum. Sir Alasdair MacDonald is currently undertaking a review of how we might implement that. As my noble Friend Lady Morgan said in another place,
	"PSHE will help children and young people understand what is appropriate and what is not appropriate touching from adults and... will give young people the confidence and assertiveness to be clear about what they see as acceptable."— [Official Report, House of Lords, 12 November 2008; Vol. 705, c. 659.]
	For learning to be truly effective, children need to feel safe, secure and happy at school, as well as receiving a high standard of education. No child should feel uncomfortable or threatened, and teachers should feel confident that they can manage situations in an appropriate and effective way, without fear of being penalised if the actions that they took were appropriate and absolutely necessary.
	It is Government's responsibility to ensure that the systems are in place to make a pupil's education and childhood as positive and as safe as they can be. We take that responsibility very seriously. We have acted, and will continue to act, to keep students and staff safe, and to build the best possible education system and world-class children's services.
	 Question put and agreed to.
	 House adjourned.